Louisiana Administrative Code › Title 19 - CORPORATION AND BUSINESS › Part VII - Louisiana Economic Development Corporation › Subpart 6 - Louisiana Economic Development Corporation › Chapter 72 - Capital Access Program › Section VII-7203 - Definitions

Current through Register Vol. 50, No. 6, June 20, 2024
A. The following
				  terms shall have the following definitions, unless the context otherwise
				  requires.
Agreement
-a contract between a financial
					 institution and the Louisiana Economic Development Corporation authorizing the
					 financial institution to participate in the program under the terms and
					 conditions specified in the agreement.
Borrower
-a qualified business that has
					 received or been approved for a qualified loan from a lender.
a. If the lender is a banking institution, national bank,
					 international institution or foreign institution a borrower may not be an
					 executive officer, director, or principal shareholder of the lender, or a
					 member of the immediate family of an executive officer, director or principal
					 shareholder of the lender or a related interest of any such executive officer,
					 director, principal shareholder or member of the immediate family.
b. If the lender is a federal credit union, a credit union
					 or an out-of-state credit union doing business in Louisiana, a borrower may not
					 be an official, immediate family member of an official or any individual having
					 a common ownership, investment or other pecuniary interest in a business
					 enterprise with an official or with an immediate family member of an official.
					 For the purposes of this Subsection an official shall mean any member of the
					 board of directors, credit committee or supervisory committee of the
lender
and
immediate family member
shall mean
					 his/her children, brothers, sisters, parents, spouse, and the parents of
					 his/her spouse.
Common Enterprise
-any business with common
					 or joint ownership.
Enrolled Loan
-a qualified loan enrolled in
					 the program.
Fees
-a non-refundable fee of no less than
					 2 percent and no more than 3 1/2 percent of the principal amount of the
					 qualified loan charged by the lender to the borrower . The lender shall pay a
					 non-refundable fee equal to the fee paid by the borrower. LEDC shall contribute
					 a match to the fee equal to the contribution of the lender, but not to exceed
					 $105,000 for a single borrower and not to exceed 10 percent of a lender's total
					 enrolled loans.
Financial Institution
-any Louisiana
					 commercial financial institution regulated by either the Louisiana Office of
					 Financial Institutions, the Federal Depository Insurance Corporation, or the
					 Federal Reserve.
LEDC
-the Louisiana Economic Development
					 Corporation.
Lender
-a participating financial
					 institution that has enrolled one or more qualified loan s under the program.
Loss
-any principal amount due and not
					 paid, accrued interest due and not paid, and documented out of pocket
					 collection expenses, at the time the lender determines, in a manner consistent
					 with its normal method and time table for making such determinations that a
					 qualified loan is uncollectible and is to be charged off as a loss . The amount
					 of principal and interest included in the loss shall not exceed the principal
					 amount of the enrolled loan, plus accrued and unpaid interest on such covered
					 principal amount, from the date the qualified loan is made.
Loss Reserve Account
-separate accounts
					 held and maintained by the participating financial institution and the
					 Louisiana Economic Development Corporation (LEDC), to cover losses sustained by
					 the participating financial institution on enrolled loans.
Participating Financial Institution
-a
					 financial institution that has executed an agreement with the Louisiana
					 Economic Development Corporation to participate in the program.
Primary Economic Effect
-the majority of
					 economic benefit resulting from a business activity occurs in Louisiana. It
					 shall be conclusively presumed that the primary economic effect is in Louisiana
					 if the following conditions exist:
a. at least 51 per cent of the total jobs of the qualified
					 business are created or retained in Louisiana; and
b. the borrower's domicile and principal place of business
					 is located in Louisiana.
Program
-the Capital Access Program.
Qualified Business
-a Louisiana
					 corporation, partnership, joint venture, sole proprietorship, cooperative, or
					 other entity, and a small business as defined by the SBA doing business for
					 profit which is authorized to conduct business in the state.
Qualified Loan
-a loan, specified portion
					 of a loan, the amount of a loan or additional loan in excess of a loan that is
					 refinanced, or the maximum amount that may be drawn down against a line of
					 credit (not to exceed five years) and its interest rate does not exceed 3.5
					 percent above New York Prime, extended by a lender to a qualified business, for any business activity which has its primary economic effect in Louisiana.
					 Excluded from the term are:
a. a loan for the construction or purchase of residential
					 housing of any kind;
b. a loan for the purchase or construction of real property
					 that is not used for the business operations of the borrower, including real
					 estate owned for the purpose of deriving income from speculation, trade, lease
					 or rental;
c. a loan for the refinancing of the remaining principal
					 balance of an existing loan;
d. unsecured loans.
AUTHORITY NOTE:
					 Promulgated in accordance with
					 R.S.
					 51:2312 (A)(7), (B)(1) and
					 (B)(3).