New York Codes, Rules and Regulations › Title 21 - Miscellaneous › Chapter L - New York State Urban Development Corporation › Part 4243 - Economic Development Fund › General › Section 4243.4 - General terms and conditions

Current through Register Vol. 46, No. 28, July 10, 2024
Program assistance shall not be provided to ineligible
					 recipients. Program assistance shall generally be offered on the applicable
					 terms and conditions set forth below, in the other provisions of this Part and
					 as more specifically set forth in the sections of this Part for each type of
					 program assistance.
(a) Loans and loan
				  guarantees. With respect to program loans and loan guarantees:
(1) Within the limitations established
				  hereunder, terms and security arrangements will be flexible, depending on the
				  type of loan and the particular characteristics of the project under
				  consideration. Loans that provide permanent financing and are secured by a
				  letter of credit or fixed assets will be preferred.
(2) Interest rates on loans will be set at
				  the time the corporation's directors approve an application. Rates and terms
				  will be determined based upon what is necessary to make the project feasible,
				  and will reflect market conditions, the borrower' s ability to repay and
				  project requirements. The interest rate established for any loan generally will
				  not be lower than three percent.
(3) Loans and loan guarantees generally will
				  be made under the following terms:
(i) Loans
				  made or guaranteed for the purpose of financing the acquisition of real
				  property or the acquisition, renovation or construction of facilities may be
				  made for a term not to exceed 20 years, provided that loan guarantees for such
				  purposes shall generally be for no more than 60 percent of the loan being
				  guaranteed or $2,000,000, whichever is less. In a co-equal and coordinate
				  mortgage situation, a mortgage granted to the corporation will match the term
				  of the other mortgage.
(ii) Loans
				  made or guaranteed for the purpose of financing the acquisition of machinery
				  and equipment may be made for a term of up to seven years or the useful life of
				  the collateral, whichever is less, provided that loan guarantees for such
				  purpose shall generally be for no more than 60 percent of the loan being
				  guaranteed or $2,000,000, whichever is less.
(iii) Working capital loans made or
				  guaranteed may be for a term of up to four years to finance capital-related
				  expenses, including, without limiting the foregoing, accounts receivable and
				  inventory, provided that working capital loan guarantees shall generally be for
				  no more than 60 percent of the loan being guaranteed or $2,000,000, whichever
				  is less.
(iv) Except as otherwise
				  set forth in this Part, loans shall generally not exceed 40 percent of the
				  total project costs.
(4)
				  Standard repayment terms generally will include level debt service payments
				  over the term of the loan. In certain circumstances, deferred or graduated
				  payments may be permitted, provided that the loan is fully amortized over the
				  remainder of the loan term.
(5)
				  Generally, the corporation shall require guarantees of a program loan or loan
				  guarantee from shareholders that own 20 percent or more of the shares of the
				  borrower and in other situations deemed appropriate by the corporation to
				  adequately secure a loan and loan guarantee obligations.