Louisiana Administrative Code › Title 19 - CORPORATION AND BUSINESS › Part VII - Louisiana Economic Development Corporation › Subpart 1 - Small Business Loan Guaranty Program › Chapter 1 - Loan Guaranty Policies › Section VII-107 - Eligibility/Ineligibility for Participation in this Program

Current through Register Vol. 50, No. 6, June 20, 2024
A. In connection with the business purpose
				  for the requested loan: for loans up to and not to exceed $100,000,
				  applicant/borrower shall create in this state at least one or shall retain in
				  this state at least one permanent full-time job; and for loans in excess of
				  $100,000, applicant/borrower(s) shall create in this state at least two new
				  permanent full-time jobs.
B. The
				  following businesses shall be eligible for participation in this program,
				  except for those ineligible businesses and purposes hereinafter shown:
1. Small business concerns organized as a
				  sole proprietorship qualified to do and doing business in Louisiana, or either
				  a for profit corporation, partnership, limited liability company, limited
				  liability partnership, joint venture, cooperative, non-profit entity with an
				  eligible business purpose as defined above, or other entity which is registered
				  and authorized to conduct business in the State of Louisiana that maintain an
				  office in Louisiana;
2. Small and
				  Emerging Businesses (SEBs) certified by LED's Small Business Services that
				  maintain an office in Louisiana;
3. disabled person's business enterprises
				  authorized to do and doing business in Louisiana, that maintain an office in
				  Louisiana; or
4. funding requests
				  for any business purpose may be considered, except for the following ineligible
				  businesses or purposes:
a. restaurants
				  (except for regional or national franchises), including grills, cafes, fast
				  food operations, motorized vehicle, trailer, curb-side, sidewalk or street
				  vender food operations, and any other business or project established for the
				  principal purpose of dispensing cooked food for consumption on or off the
				  premises having been in operations less than two years;
b. bars, saloons, daiquiri shops, operations
				  for the sale of alcoholic popsicles and other alcoholic food items, packaged
				  liquor stores, including any other business or project established for the
				  principal purpose of dispensing, packaging, or distributing alcoholic
				  beverages;
c. any business or
				  establishment which has gaming or gambling as its principal business;
d. any business or establishment which has
				  consumer or commercial financing as its business;
e. funding for the acquisition, renovation,
				  or alteration of a building or property for the principal purpose of real
				  estate speculation, rental, or any other passive real estate investment
				  purposes;
f. funding for the
				  principal purpose of refinancing existing debt unless under the following
				  conditions:
i. a lender may refinance a
				  borrower's existing loan, line of credit, extension of credit, or other debt
				  originally made by an unaffiliated lender only if the following conditions are
				  met:
(a). the amount of the refinanced loan
				  or other debt is at least 150 percent of the previous outstanding
				  balance;
(b). the transaction
				  results in a 30 percent reduction in the fee-adjusted APR contracted for the
				  term of the new debt, to help ensure that funding is used only for transactions
				  that meaningfully benefit borrowers by providing access to sustainable
				  products; and
(c). proceeds of the
				  transaction are not used to finance an extraordinary dividend or other
				  distribution.
ii. a
				  lender may use funds to support a new extension of credit that repays the
				  amount due on a matured loan or other debt that was previously used for an
				  eligible business purpose when all the following conditions are met:
(a).  the amount of the new loan or other
				  debt is at least 150 percent of the outstanding amount of the matured loan or
				  other debt;
(b). the new credit
				  supported with funding is based on a new underwriting of the small business's
				  ability to repay the loan and new approval by the lender;
(c). the prior loan or other debt has been
				  paid as agreed and the borrower was not in default of any financial covenants
				  under the loan or debt for at least the previous 36 months (or since
				  origination, if shorter); and
(d).
				  proceeds of the transaction are not used to finance an extraordinary dividend
				  or other distribution.
g. funding for the purpose of buying out any
				  stockholder or equity holder by another stockholder or equity holder in a
				  business;
h. funding for the
				  purpose of establishing a park, theme park, amusement park, or camping
				  facility;
i. funding for the
				  purpose of buying out any family member or reimbursing any family
				  member;
j. funding for the purpose
				  of pyramid sales;
k. funding
				  activities related either directly or indirectly to
				  cryptocurrency.