Oregon Administrative Rules › Chapter 123 - OREGON BUSINESS DEVELOPMENT DEPARTMENT › Division 19 - OPERATION OF OREGON ENTREPRENEURIAL DEVELOPMENT LOAN FUND › Section 123-019-0050 - Loan Agreement

Current through Register Vol. 63, No. 7, July 1, 2024
If the Finance Manager approves the loan, the Finance Manager,
				on behalf of the state, and the borrower may enter into a loan contract of not
				more than $1,000,000, secured by Collateral, which shall set forth, among other
				matters:
(1) A plan for repayment by
			 the Borrower to the Fund of monies borrowed from the Fund used for the Project,
			 with interest charged on those monies at a fixed rate of at least two
			 percentage points (2%) more than the prevailing bank prime interest rate. For
			 the purposes of this section, the prevailing bank prime interest rate shall be
			 the rate set forth in the most recent Federal Reserve Statistical Release
			 H.15(519) which the Department has received at the time the loan is approved.
			 Loans secured by collateral with a collateral coverage ratio of less than 1:1,
			 may be subject to a higher interest rate established at the sole discretion of
			 the Department, based on the final collateral value established by the
			 Department. The loan's interest rate may be increased by no more than 1%
			 between each 10% collateral deficiency threshold. Notwithstanding the
			 foregoing, the interest shall not exceed 18 percent per annum. The repayment
			 plan, among other matters:
(a) Shall provide
			 for commencement of repayment by the Applicant of monies used for the Project
			 and interest thereon no later than six months after the date of the loan
			 contract or at such other time as the Finance Manager may provide;
(b) May provide for reasonable extension of
			 the time for making any repayment, not to exceed six months, in emergency or
			 hardship circumstances if approved by the Finance Manager;
(c) Shall provide for such evidence of debt,
			 assurance of and security for, repayment of the loan as is considered necessary
			 by the Finance Manager;
(d) Shall
			 set forth a schedule of payments which shall not exceed the usable life of the
			 assets financed and the term of the loan shall not exceed ten years from the
			 date of the contract, whichever is less. The payment schedule shall include
			 payment of interest which accrues during any period of delay in repayment
			 authorized by subsection (b) of this section, and the payment schedule may
			 require payments of varying amounts for collection of accrued
			 interest;
(e) Shall set forth a
			 procedure for formal declaration of delinquency or default of payment by the
			 Department. Loans shall be declared delinquent when any payment is more than
			 ten days late. Borrower shall be notified in writing of declaration of
			 delinquency and shall have 31 days from the original payment date to bring the
			 loan current. If the loan is not brought current, or arrangements satisfactory
			 to the Department for bringing the loan current have not been made, the
			 Department may declare the loan in default, may declare the entire outstanding
			 indebtedness to be forthwith due and payable and may assign the loan to the
			 Attorney General for collection. The Department shall inform the borrower of
			 each default and action taken in connection therewith. The Finance Manager may
			 in their sole discretion waive or delay such assignment.