Mont. Admin. R. 8.99.511 - MICROBUSINESS LOANS - ELIGIBILITY FOR AND TERMS AND CONDITIONS
(1) Microbusiness loan applicants will be
required to certify to the MBDCs, that the applicants are eligible borrowers as
defined in
17-6-403 and
17-6-407, MCA.
(2) Full-time equivalent employment of the
microbusiness loan applicant will be measured for the purpose of determining
eligibility on the basis of the payroll period immediately prior to the loan
application date.
(3) All
microbusiness loans having repayment terms of more than ten years must be
approved by the department .
(4) The
interest rate charged to microbusiness borrowers by MBDCs shall be, at a
minimum, the highest rate charged by the department to the MBDC for development
loans and, at a maximum, the rate of interest that does not exceed the greater
of 15 percent or an amount that is 6 percentage points per year above the prime
rate published by the federal reserve system in its statistical release H.15
Selected Interest Rates for bank prime loans dated three business days prior to
the execution of the agreement. MBDCs will report quarterly, in writing to the
department , the interest rate(s) charged to borrowers.
(5) A single loan to a microbusiness shall
not exceed $100,000 and the outstanding balance of all loans to a microbusiness
or a project participated in by more than one microbusiness or to two or more
microbusinesses in which any one principal of the microbusiness holds more than
a 20 percent equity share shall not exceed $100,000.
(6) Development loan funds may not be used to
refinance a delinquent or nonperforming loan or a portion of a delinquent or
nonperforming loan held by a bank, financing company, or the MBDC. Any
delinquent debt by the microbusiness loan applicant or any of its principals
shall cause the applicant to be ineligible to receive a loan from development
loan funds. Development loan funds may not be used to satisfy any
delinquency.
(7) Eligible uses of
the cash proceeds of a microbusiness loan by a microbusiness include:
(a) business and industrial
acquisitions;
(b) business
construction, conversion, enlargement, repair, modernization, or
development;
(c) purchase of
equipment, leasehold improvements, machinery, or supplies;
(d) start-up operating costs and working
capital; and
(e) consolidation
and/or the paying off of a number of performing loans originated and held by
banks, of which the microbusiness is the debtor.
Notes
17-6-406, MCA; IMP, 17-6-406, 17-6-407, MCA;
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