Or. Admin. R. 123-019-0040 - Loan Conditions

The Director may approve a loan request if the Director finds that:

(1) The Applicant and the project are eligible for a loan from the Fund according to the criteria set forth in OAR 123-019-0020 and 123-019-0030.

(2) The Applicant has available, and has irrevocably committed to the project, Equity funds in the form of cash or property in an amount equal to or greater than 20 percent of the amount of the loan from the Fund.

(3) The proposed project is feasible and a reasonable risk from practical and economic standpoints, and the loan has a reasonable prospect of repayment from cash flow and collateral.

(4) The Applicant will provide good and sufficient collateral for the loan. The department reserves the right to require liens on all business assets and personal assets necessary to secure the loan at a "loan to value" ratio ("LTV") of 100% or provide for a collateral coverage ratio of 1:1. In the event of a collateral shortfall, the LTV of the proposed loan may be no more than 200% or provide for a collateral coverage ratio of at least 1:2 applying the following advance rates:

(a) Real property will generally be valued for collateral purposes at 80 percent of the tax assessed value or 90 percent of appraised value;

(b) New construction will generally be valued for collateral purposes at no more than 90 percent of cost;

(c) Existing machinery will generally be valued for collateral purposes at 70 percent of depreciated book value;

(d) Newly acquired machinery will generally be valued for collateral purposes at 60 percent of acquisition cost for new equipment and 75% of acquisition cost for used equipment.

(5) The Department may, in its sole discretion, assign a value of more or less than the above percentages. Applicants should be aware that the collateral value of property located or housed out-of-state will be significantly discounted from nominal assessed or appraised value.

(6) Monies in the Fund are or will be available for the proposed project.

(7) The Applicant's financial resources and management capability appear adequate to assure success of the project and repayment of the loan.

(8) The amount borrowed from the Fund by any borrower does not exceed $250,000.

(9) The Applicant agrees to abide by all local, state and federal laws and regulations and will obtain all applicable federal, state and local permits and licenses before the disbursement of any proceeds from the Fund.

Notes

Or. Admin. R. 123-019-0040

EDD 16-1991(Temp), f. & cert. ef. 11-8-91; EDD 12-1992, f. & cert. ef. 8-26-92; EDD 11-1997(Temp), f. & cert. ef. 10-7-97; Reverted to EDD 12-1992, f. & cert. ef. 8-26-92; EDD 10-1998, f. & cert. ef. 5-22-98; EDD 5-2007(Temp), f & cert. ef. 8-28-07 thru 2-22-08; Reverted to EDD 10-1998, f. & cert. ef. 5-22-98; EDD 4-2008(Temp), f. & cert. ef. 2-26-08 thru 8-1-08; EDD 23-2008, f. 7-31-08, cert. ef. 8-1-08; OBDD 10-2010(Temp), f. & cert. ef. 4-12-10 thru 10-9-10; OBDD 34-2010, f. & cert. ef. 10-1-10; OBDD 35-2010, f. 10-14-10, cert. ef. 10-15-10; OBDD 12-2014, f. 6-30-14, cert. ef. 7-1-14; OBDD 2-2021, temporary amend filed 01/19/2021, effective 1/19/2021 through 7/9/2021; OBDD 7-2021, amend filed 07/02/2021, effective 7/2/2021

Statutory/Other Authority: ORS 285A.075 & OL 2020 2nd SS Ch 10 Sec 26 and 27

Statutes/Other Implemented: OL 2020 2nd SS Ch 10 Sec 26 and 27, ORS 285B 740, ORS 285B 743, ORS 285B 746, ORS 285B 749 & ORS 285B 758