Administrative Rules of Montana › Department 8 - COMMERCE › Chapter 8.99 - MONTANA OFFICE OF TOURISM AND BUSINESS DEVELOPMENT DIVISION › Subchapter 8.99.5 - Microbusiness Finance Program › Rule 8.99.505 - DEVELOPMENT LOAN - MATCHING CONTRIBUTIONS

Current through Register Vol. 13, July 5, 2024
(1) MBDC
				matching loan funds, in the ratio of at least $1 from the MBDC for each $6 of
				development loan funds provided by the department, must be provided in
				cash.
(2) The full amount of the
				MBDC's cash matching funds must be deposited in the revolving loan fund bank
				account before the development loan proceeds are deposited by the department in
				revolving loan fund bank account, except that, when the MBDC presents a legally
				binding commitment for cash matching funds from a federal agency contingent
				only upon disbursement of the development loan, the development loan may be
				disbursed prior to deposit of that committed federal portion of the cash
				matching funds.
(3) In order to
				assist a MBDC in obtaining cash matching funds from other sources, the
				department may provide a legally binding commitment to a MBDC to award a
				development loan, contingent on receipt and deposit of cash matching funds as
				specified in the loan agreement. Such a commitment will be made first to MBDCs
				with cash matching funds ready and available and then to MBDCs with strong
				evidence of commitments. Commitments to those developing cash matching funds
				must have an expiration date.
(4)
				All development loan and MBDC matching loan funds not invested in microbusiness
				loans must be deposited and maintained in the revolving loan fund bank account
				or the investment bank account at all times.
(5) MBDC matching loan funds must be
				deposited, invested, and lent together with the development loan proceeds, in
				the ratio of at least $1 from the MBDC for each $6 of development loan funds
				provided by the department, and must be used for only those purposes for which
				the development loan fund proceeds are used, as defined in
				17-6-407, MCA.
(6) All development loan proceeds shall be
				used to establish a revolving loan fund from which loans made directly by the
				MBDC to microbusinesses and/or loans made directly by banks to qualified
				microbusinesses are guaranteed. The guarantee agreement between the bank and
				the MBDC must be approved by the department.
(7) The sum of the outstanding principal
				balance of the department development loan and the MBDC's matching loan funds
				is referred to as the "revolving loan fund base". The sum of the revolving loan
				fund bank account balance and investment bank account balance is referred to as
				the "revolving loan fund cash balance". The sum of the outstanding principal
				balance of all performing and delinquent microbusiness loans held by the MBDC
				in the revolving loan fund is referred to as the "eligible loan receivables
				balance". Restructured loans will be considered, on a case-by-case basis, in
				the calculation of the revolving loan fund base. All MBDCs shall report and
				document the revolving loan fund cash balance and the eligible loan receivables
				balance. The sum of the revolving loan fund cash balance and the eligible loan
				receivables balance must equal or exceed the "revolving loan fund base" at all
				times. If the sum of the revolving loan fund cash balance and the eligible loan
				receivables balance is less than the revolving loan fund base, this difference
				is referred to as the "revolving loan fund base deficiency". If a MBDC incurs a
				"revolving loan fund base deficiency," the MBDC shall deposit additional funds
				equal to or greater than the "revolving loan fund base deficiency" in the
				revolving loan fund bank account.
17-6-406, MCA; IMP,
					 17-6-406,
					 MCA;