Illinois Administrative Code › Title 14 - COMMERCE › Part 570 - ILLINOIS SMALL BUSINESS DEVELOPMENT PROGRAM › Section 570.70 - Administrative Requirements

Current through Register Vol. 48, No. 28, July 12, 2024
a)
			 Direct Funding
1) Loan Recipients
A) Loan Terms - Loans for real estate
			 normally will be repaid over a period of up to 10 to 25 years; loans primarily
			 utilized for machinery and equipment will generally vary from 5 to 10 years.
			 Loans not secured by a lien on tangible assets generally require personal
			 guarantees. Loans primarily intended for short term working capital needs will
			 normally be repaid over a period of 3 months to 5 years. These loans will
			 generally require personal guarantees from all individuals/entities owning or
			 controlling 20 percent or more of the applicant company, or any lower amount as
			 determined by the Department. For small companies without major identifiable
			 principals (e.g., no one owns 20% or more of the company), the amount of the
			 loan may be limited to 80% of the value of the fixed asset securing the loan.
			 Periodic installments shall be due and payable to the Department in the method
			 and time(s) specified in the loan agreement. All payments shall be applied
			 first to interest and then to principal on all simple interest loans. All
			 payments on amortized loans will be applied to the amortization schedule as
			 stated.
B) Reporting - The
			 Recipient (applicant receiving loan funds) will provide, at least annually,
			 information and reports required by the Department (e.g., reports on job
			 creation/retention; financial statement of assets, liabilities, and net
			 worth).
C) Monitoring and
			 Evaluation - Recipients must permit any agent authorized by the Department,
			 upon presentation of credentials, to have full access to and the right to
			 examine any documents, papers, and records of the Recipient involving
			 transactions related to a loan from the Department.
D) Recipients shall keep detailed records of
			 the project and the use of loan proceeds. Recipients of loans of more than
			 $100,000 shall furnish to the Department, with the submission of financial
			 statements (see Section
			 570.70(a)(1)(E)
			 ) following the expenditure of project funds, a written audit of the project
			 and the use of loan proceeds. The audit shall be conducted by certified public
			 accountants licensed by the State of Illinois in accordance with the Illinois
			 Public Accounting Act (Ill. Rev. Stat. 1991, ch. 111, pars. 5500-5536) [225
			 ILCS 450 ] unless for good cause, the Department allows the audit to be
			 conducted by an accountant certified by the proper authorities of another state
			 and shall be in accordance with generally accepted auditing standards adopted
			 by the American Institute of Certified Public Accountants (AICPA) (1991, with
			 no later amendments or editions). The address of the AICPA is: 1211 Avenue of
			 the Americas, New York NY 10036-8775. For Recipients of loans equal to or less
			 than $100,000 the Department or its designee will conduct one or more
			 inspections of the project and the use of loan proceeds records to verify the
			 use of project funds.
E) Financial
			 Statements - The Recipient shall provide as often as requested by the
			 Department, an unaudited financial statement of the Recipient as at the end of
			 the quarter of the Recipient's fiscal year then elapsed, certified by the
			 Recipient's principal financial officer (e.g., controller, treasurer, chief
			 financial officer) and prepared in accordance with generally accepted
			 accounting principles (issued by the Financial Accounting Standards Board
			 (FASB) (1991, no later amendments or editions) located at 401 Merritt Seven,
			 P.O. Box 5116, Norwalk CT 06856) and fairly presenting the financial position
			 and results of all operations of the Recipient for such quarter. The Recipient
			 shall furnish to the Department:
i) if the
			 original amount of the loan is less than or equal to $100,000, as soon as
			 available, but not later than 120 days after the end of each fiscal year of the
			 Recipient, a true and correct copy of the Recipient's federal income tax return
			 for such year just ended; provided, however, that if the Recipient provides the
			 Department with a copy of a request for automatic extension filed by the
			 Recipient with the Internal Revenue Service, the required date of delivery
			 shall automatically be extended for four months if the Recipient is an
			 individual and six months if the Recipient is a corporation;
ii) if the original amount of the loan is
			 greater than $100,000 but less than or equal to $250,000, as soon as available,
			 but not later than 120 days after the end of each fiscal year of the Recipient,
			 financial statements of the Recipient as at the end of such year (reviewed by
			 certified public accountants, licensed by the State of Illinois or any other
			 state and satisfactory to the Department) containing a certificate of the
			 aforesaid public accountants certifying to the Department that they are not
			 aware of the occurrence or existence of any condition or event which
			 constitutes a default; or
iii) if
			 the original amount of the loan is greater than $250,000, as soon as available,
			 but not later than 120 days after the end of each fiscal year of the Recipient,
			 financial statements of the Recipient as at the end of such year examined by
			 certified public accountants (licensed by the State of Illinois or any other
			 state and satisfactory to the Department) containing the unqualified opinion of
			 such public accountants with respect to the financial statements and a
			 certificate of the aforesaid public accountants certifying to the Department
			 that they are not aware of the occurrence or existence of any condition or
			 event which constitutes a default.
iv) if a Recipient has complied with Section
			 570.70(a)(1)(D)
			 and has submitted financial statements in accordance with Section
			 570(a)(1)(E)(ii) or (iii) covering the fiscal year ending after the date of
			 funding, the Department may, for good cause (i.e., financial hardship, merger,
			 change of fiscal year end, etc.), accept:
for a loan with an original amount of at least $100,000, but
				less than $250,000, a copy of the Recipient's federal tax return and compiled
				financial statements, or
for a loan with an original amount of $250,00, or more,
				reviewed financial statements.