Mississippi Administrative Code › Title 6 - Economic Development › Part 9 - Economic Development Division › Chapter 4 - Small Business Loan Guarantee Program › Rule 6-9-4.11 - Loan Administration

Current through June 25, 2024
Loan Closing
. All closing documents must be
				  properly executed, and a copy must be provided to the MDA upon the loan
				  closing. The Financial Institution may be asked to provide, in writing, all
				  required information for the preparation of any SBLGP loan closing documents.
				  All exhibits to the closing documents must be filed and copies must be sent to
				  MDA no later than thirty (30) days from the date of the closing.
Lender Fee.
The financial institution may
				  charge the business a servicing fee, which may not exceed two percent (2%) of
				  the SBLGP loan amount greater than $25,000 or $500 for loans under $25,000. The
				  fee will be a one-time charge collected at the loan closing. The fee may be
				  paid directly by the business, deducted from the SBLGP loan proceeds, or
				  financed as part of the Financial Institution's loan.
Loan Servicing.
The Financial Institution
				  will be responsible for underwriting and servicing the SBLGP loan. Lenders must
				  provide all key terms in an easy-to understand manner. Such disclosures could
				  include: the loan or investment amount, payment obligation and schedule, any
				  terms giving the participant control over the borrower's or investee's cash
				  balances, cash flows or ownership, any conversion rights and future rights to
				  purchase equity, and any fees or extra costs. The Financial Institution will
				  enforce the terms and conditions of all closing documents executed for the
				  SBLGP Loan.
Reporting.
The Financial Institution will
				  report quarterly to the MDA on the status of the loan. The Financial
				  Institution will submit a loan transaction history report summarizing the
				  current balance, payments on principal to date, payments on interest to date,
				  and any past due statements. The Financial Institution will also complete and
				  submit an annual report in the format to be provided by the MDA. Additionally,
				  the lender is required to immediately report any material change in the status
				  of the borrower or collateral.
Prepayment & Loan Default.
The Financial
				  Institution shall notify the MDA in writing of any prepayments of the Financial
				  Institution's loan. The Financial Institution's Loan and Note is prohibited
				  from being sold, assigned, conveyed, sub-participated, subdivided, encumbered,
				  or otherwise transferred. The MDA will consider any loan that has become
				  delinquent in amount equal to the required payment to be in default. In the
				  event of a loan default, the Financial Institution will submit a claim form on
				  the guarantee once all required collection procedures have been performed. The
				  guarantee payments will be calculated after all collateral has been applied to
				  the outstanding balance. The SBLGP guarantee will reimburse the financial
				  institution for its loss, up to the percentage of the SBLGP guarantee.
Audit.
Guaranties made under the SBLGP are
				  subject to audit by the State Department of Audit
Miss. Code
				  Ann. §
										57-10-601;
				  12 USC §
											5701 et
				  seq.