Louisiana Administrative Code › Title 19 - CORPORATION AND BUSINESS › Part VII - Louisiana Economic Development Corporation › Subpart 9 - Micro Loan Program › Chapter 76 - SSBCI Micro Lending Program ARPA 2021 › Section VII-7601 - Purpose

Current through Register Vol. 50, No. 6, June 20, 2024
A. The Louisiana
				  Economic Development Corporation (LEDC) wishes to stimulate the flow of private
				  capital, short term loans, lines of credit loans, and other financial
				  assistance through a mission driven focus in creating a revolving loan fund for
				  the sound financing of the development, expansion, and retention of small
				  business concerns in Louisiana as a means of helping to start or grow their
				  business and of providing employment, income growth, and expanded economic
				  opportunities, especially to Small Businesses owned by Socially and
				  Economically Disadvantaged Individuals (SEDI) and to those Very Small
				  Businesses (VSB).
B. Through the
				  American Rescue Plan Act of 2021, which reauthorized the State Small Business
				  Initiative (SSBCI), the U.S. Congress has appropriated funds to be allocated
				  and disbursed to the states that have created programs to increase the amount
				  of capital made available by private lenders to small businesses, and the State
				  of Louisiana has been approved to receive and disburse SSBCI funds within the
				  SSBCI Program. The Louisiana Department of Economic Development, which will be
				  working with and through LEDC, has been designated to provide services for the
				  SSBCI, including the Micro Lending Program (MLP), which by a Program
				  Participation Agreement previously entered into, between LEDC and the Lender to
				  make additional capital available for the loan. The LEDC will utilize SSBCI
				  funds to increase access to credit and capital funding to further assist small
				  businesses statewide, to expand loan capabilities to a broader range of
				  businesses statewide, to direct a greater concentration to those small
				  businesses, and to reach, identify and promote small business growth in low and
				  moderate income communities, in minority communities, in other underserved
				  communities, and to small businesses owned by socially and economically
				  disadvantaged individuals across our state..
C. By partnering with Louisiana CDFIs and
				  other qualifying lenders who share a similar mission driven focus as the
				  purpose of this program, LEDC will provide funding to participating CDFIs, and
				  other qualifying lenders having been approved as a participating lender, for
				  the purpose of making direct loans up to $100,000 to small businesses meeting
				  the SSBCI criteria as outlined in the program participation
				  agreement.
D. Interested small
				  businesses will be referred to participating Lenders for loan qualification
				  purposes. Participating Lenders will apply to LEDC for acceptance to enroll a
				  loan or line of credit under the Program on behalf of their qualified small
				  business borrowers. Participating Lenders are responsible for their own credit
				  underwriting decisions and originating the loans. LEDC's responsibility is: to
				  ensure compliance with the Micro Lending Program requirements; ensure
				  compliance with the SSBCI requirements as directed by Treasury, as well as
				  participation in the program; and to report to the U.S. Treasury.
E. In considering acceptance of the loans
				  presented to LEDC through Lenders having agreed to participate in the Micro
				  Lending Program, the Corporation will consider sound business purpose loans and
				  lines of credit, so long as SSBCI resources permit. The board of directors of
				  the corporation recognizes that loan participations carry certain risks and are
				  willing to undertake reasonable exposure.
F. LEDC will monitor the program, including
				  the repayment progress of borrowers, as well as the servicing performance of
				  participating lenders, in order to ensure successful outcomes in the form of
				  program utilization and eventual securing of funds for these groups.
AUTHORITY
					 NOTE: Promulgated in accordance with R.S. 36:104, 36:108 and
					 51:2312