123-019-0040 Loan Conditions The Finance Manager may approve a loan request if the Finance Manager 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: (a) Fifteen percent of the amount of the project proceeds used for working capital and equipment; or (b) Ten percent of the amount of the project proceeds used to acquire real property. (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 no greater than the advance rate applicable to the underlying asset 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 two times the advance rate applicable to the underlying asset or provide for a collateral coverage ratio of at least 0.5:1 applying the following advance rates: (a) Real property will generally be valued for collateral purposes at 80 percent of the County Assessor’s tax assessed or real market value, or 90 percent of appraised value or acceptable broker opinion of value. Special-use or limited-use property may be further discounted at the sole discretion of the Department; (b) New construction will generally be valued for collateral purposes at no more than 90 percent of cost or 90 percent of the as-completed value, whichever is less, and may be further discounted for special-use or limited-use property; (c) Existing equipment will generally be valued for collateral purposes at 70 percent of depreciated book value; (d) Newly acquired equipment 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 lifetime amount borrowed from the Fund by any Applicant in combination with any related entities does not exceed $1,000,000. (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. (10) The Applicant must be current on its local, state and federal tax obligations or has entered into and is current on its repayment agreement with the applicable taxing authority or authorities. Statutory/Other Authority: ORS 285A.075, OL 2020 2nd SS Ch 10 Sec 26-27 & ORS 285B.758 Statutes/Other Implemented: OL 2020 2nd SS Ch 10 Sec 26-27, ORS 285B.740, ORS 285B.743, ORS 285B.746, ORS 285B.749 & ORS 285B.758 History: OBDD 4-2025, amend filed 05/19/2025, effective 05/19/2025 OBDD 1-2023, amend filed 01/18/2023, effective 01/18/2023 OBDD 4-2022, temporary amend filed 03/09/2022, effective 03/09/2022 through 09/02/2022 OBDD 7-2021, amend filed 07/02/2021, effective 07/02/2021 OBDD 2-2021, temporary amend filed 01/19/2021, effective 01/19/2021 through 07/09/2021 OBDD 12-2014, f. 6-30-14, cert. ef. 7-1-14 OBDD 35-2010, f. 10-14-10, cert. ef. 10-15-10 OBDD 34-2010, f. & cert. ef. 10-1-10 OBDD 10-2010(Temp), f. & cert. ef. 4-12-10 thru 10-9-10 EDD 23-2008, f. 7-31-08, cert. ef. 8-1-08 EDD 4-2008(Temp), f. & cert. ef. 2-26-08 thru 8-1-08 Reverted to EDD 10-1998, f. & cert. ef. 5-22-98 EDD 5-2007(Temp), f & cert. ef. 8-28-07 thru 2-22-08 EDD 10-1998, f. & cert. ef. 5-22-98 Reverted to EDD 12-1992, f. & cert. ef. 8-26-92 EDD 11-1997(Temp), f. & cert. ef. 10-7-97 EDD 12-1992, f. & cert. ef. 8-26-92 EDD 16-1991(Temp), f. & cert. ef. 11-8-91