Administrative Rules of Montana › Department 8 - COMMERCE › Chapter 8.99 - MONTANA OFFICE OF TOURISM AND BUSINESS DEVELOPMENT DIVISION › Subchapter 8.99.4 - Microbusiness Advisory Council › Rule 8.99.401 - DEFINITIONS

Current through Register Vol. 13, July 5, 2024
As used in this subchapter, the following definitions
				  apply:
(1) "Bank" means an
				organization that is engaged in the business of banking. The term includes
				savings banks, savings and loan associations, credit unions, and trust
				companies.
(2) "Certification"
				means the criteria and process, described herein, by which an organization
				becomes eligible to participate in the microbusiness finance program as a
				"certified" MBDC and to apply for a development loan.
(3) "Default" shall be defined in the
				development loan agreement between the department and MBDC.
(4) "Defaulted loan" means a loan that the
				borrower has failed to make three or more timely payments of principal and
				interest, or whose payments of principal and interest are greater than 90 days
				past due or has otherwise failed to comply with the terms and conditions of the
				loan agreement.
(5) "Delinquent
				loan" means a loan that the borrower has failed to make one or two timely
				payments of principal and interest, or whose payment of principal and interest
				are greater than one day and less than 90 days past due.
(6) "Department" means the Department of
				Commerce provided for in
				2-15-1801, MCA.
(7) "Deposit account" means a demand,
				checking, time, savings, or passbook account maintained with a federally
				insured bank.
(8) "Development
				loan" means money loaned to a certified MBDC by the department for the purpose
				of establishing a revolving loan fund from which loans are made directly to
				microbusinesses, or loans made directly by banks to qualified microbusinesses
				are guaranteed under the provisions of
				17-6-401, MCA, et seq.
(9) "Development loan funds" means the cash
				proceeds of a development loan and the portion of the revolving loan fund
				directly provided by the development loan.
(10) "Direct loan program" means a program in
				which a certified MBDC uses development loan funds for establishing a revolving
				loan fund from which loans are made directly by the certified MBDC to
				microbusinesses under the provisions of
				17-6-401, MCA, et seq.
(11) "Federally insured bank" means a bank
				that is insured by the Federal Deposit Insurance Corporation or the National
				Credit Union Share Insurance Fund.
(12) "Funded" means a certified MBDC that has
				a development loan balance outstanding and that provides technical assistance
				and loans to microbusinesses.
(13)
				"Funded loan loss reserve" means cash reserved for the purpose of self-insuring
				the MBDC for the cost of loan losses. The funded loan loss reserve shall only
				be used for covering the cost of loan losses when a loan is charged off. After
				a loan is charged off, all loan funds recovered by the MBDC shall be credited
				and deposited to the funded loan loss reserve and revolving loan fund bank
				account. The funded loan loss reserve (cash) is held in the revolving loan fund
				bank account and is not available for lending to microbusinesses or for payment
				of revolving loan fund operating expenses. Funded loan loss reserve cash may be
				generated from revolving loan fund income.
(14) "Investment bank account" means the
				deposit account in which department development loan funds, MBDC matching loan
				funds, and funded loan loss reserve funds may be deposited or transferred to,
				from the revolving loan fund bank account, for the sole purpose of generating
				investment income on idle revolving loan fund assets. The investment bank
				account is a time deposit account maintained with a federally insured
				bank.
(15) "Loan committee" means
				the individuals assigned by the board of directors of the MBDC to review and
				award or deny applications to that MBDC for microbusiness loans.
(16) "Loan guarantee program" means a program
				in which a certified MBDC uses development loan funds for establishing a
				revolving loan fund from which loans made directly by banks to qualified
				microbusinesses are guaranteed under the provisions of
				17-6-401, MCA, et seq.
(17) "Management training" means
				business-related training in a group setting performed for the benefit of
				microbusinesses and their principals.
(18) "MBDC" means the microbusiness
				development corporation.
(19)
				"Microbusiness" means a legal for profit or nonprofit Montana business with
				fewer than ten full-time equivalent employees and annual gross revenues of less
				than $1,000,000.
(20)
				"Microbusiness development corporation" means a nonprofit corporation organized
				and existing under the laws of the state of Montana to provide management
				training, technical assistance, and access to capital for the startup or
				expansion of microbusinesses. Microbusiness development corporations
				arecertified by the department to provide management training, technical
				assistance, and loans to microbusinesses, as provided in
				17-6-408, MCA. Microbusiness
				development corporations may apply for and, if approved by the department, be
				awarded a development loan for establishing a revolving loan fund from which
				loans are made directly by the certified microbusiness development corporation
				to microbusinesses, or loans made directly by banks to qualified
				microbusinesses are guaranteed by the microbusiness development
				corporation.
(21) "Performing loan"
				means a loan that the borrower is current in its compliance or satisfaction of
				all loan agreement terms and conditions. A performing loan is not a defaulted,
				delinquent, or restructured loan.
(22) "Principals" means members, officers,
				directors, and other individuals directly involved in the operation and
				management (including setting policy) of a legal entity.
(23) "Program" means the microbusiness
				finance program established in
				17-6-406, MCA.
(24) "Region" means one of not more than 12
				multicounty service regions.
(25)
				"Renewal" means a MBDC that is currently certified, meets the requirements for
				certification for an additional term and if approved, is awarded an extension
				of its development loan for an additional term.
(26) "Restructured loan" means a defaulted or
				delinquent loan that has had its original loan agreement terms and conditions
				modified by the lender. The agreement to restructure may result from
				noncompliance or nonsatisfaction of all the loan agreement terms and conditions
				by the borrower or legal action against the borrower or may simply be an
				agreement to which both the lender and the borrower consent.
(27) "Revolving loan fund" means all assets
				obtained through or related to a department development loan and MBDC matching
				loan funds that are recorded by the MBDC in a separate accounting ledger and
				which are accounted for along with related liabilities, revenues, and expenses,
				separate from the MBDC's other assets and financial activities.
(28) "Revolving loan fund bank account" means
				the deposit account in which revolving loan fund assets that are obtained
				through or related to a department development loan, MBDC matching loan funds,
				and the income earned or derived from the operation of the revolving loan fund
				are deposited by the MBDC.
(29)
				"Revolving loan fund income" means the proceeds from interest, fees, and any
				other income earned or derived from the operation of the revolving loan
				fund.
(30) "Statewide MBDC" means a
				MBDC that meets all requirements for statewide certification stated herein,
				and, in addition, has a viable plan to provide specialized services to
				constituents throughout the state, and does not preempt or duplicate efforts of
				MBDCs within local communities.
(31) "Technical assistance" means
				business-related consultation in a one-to-one setting performed for the benefit
				of microbusinesses and their principals.
(32) "Transitional" means a MBDC that is
				certified and that has a development loan outstanding but which is not
				currently offering new loans to microbusinesses with development loan funds. A
				"transitional MBDC" has selected the installment payment termination option to
				repay its outstanding development loan balance.
(33) "Unfunded" means a certified MBDC that
				does not have a development loan balance outstanding.
17-6-406, MCA; IMP,
					 17-6-406,
					 17-6-408,
					 MCA;