Oregon Administrative Rules › Chapter 123 - OREGON BUSINESS DEVELOPMENT DEPARTMENT › Division 17 - OPERATION OF OREGON BUSINESS DEVELOPMENT FUND › Section 123-017-0035 - Loan Agreement

Current through Register Vol. 63, No. 7, July 1, 2024
If the Finance Committee approves the business development
				project, the Finance Committee or the Director, on behalf of the state, and the
				borrower may enter into a loan contract of not more than $2,000,000, secured by
				good and sufficient collateral (except as noted in OAR
				123-017-0030(1)(c)),
				as determined by the Finance Committee, that shall set forth, among other
				matters:
(1) A plan for repayment by
			 the borrower to the Oregon Business Development Fund moneys borrowed from the
			 Fund used for the business development project with interest charged on those
			 moneys at the fixed rate of one percentage point more than the prevailing
			 interest rate on United States Treasury bills, notes or bonds of a comparable
			 maturity. Loans made from the Oregon Targeted Development Account shall be made
			 at a fixed interest rate of four percentage points less than the prevailing
			 prime rate. Loans made under the conditions of OAR 123-0017-0015(10) shall be
			 made at a fixed interest rate of not less than five percentage points over the
			 prevailing prime rate. The rate on any loan shall not be less than four
			 percent. For the purposes of this section, the prevailing interest rate shall
			 be the last published daily interest rate as set forth in the most recent
			 Federal Reserve Statistical Release H.15(519) that the Department has received
			 at the time the loan is approved. The repayment plan, among other matters:
(a) Shall provide for commencement of
			 repayment by the applicant of moneys used for the business development project
			 and interest thereon no later than one year after the date of the loan contract
			 or at such other time as the Finance Committee may provide;
(b) May provide for reasonable extension of
			 the time for making any repayment in emergency or hardship circumstances if
			 approved by the Finance Committee or the Director;
(c) Shall provide for such evidence of debt
			 assurance of, and security for, repayment of the loan as is considered
			 necessary by the Finance Committee;
(d) Shall set forth a schedule of payments
			 and the period of loan which shall not exceed the usable life of the contracted
			 project or 25 years from the date of the contract, whichever is less. The
			 payment schedule shall include repayment of interest that accrues during any
			 period of delay in repayment authorized by subsection (a) of this section, and
			 the payment schedule may require payments of varying amounts for collection of
			 accrued interest. The term of the Fund loan will normally be matched to, and
			 not exceed twice that of, the commercial or private lender participating in the
			 project, if applicable. Loans from the Oregon Targeted Development Account
			 shall be for a maximum term of 5 years, with a maximum amortization of 15
			 years. Loans made under the terms of OAR
			 123-017-0015(10)
			 shall be for a maximum term of 5 years, with a maximum amortization of 20
			 years.
(e) A request to renew any
			 loan from the Fund that has reached its scheduled maturity and has not been
			 repaid in full may be approved by the Finance Committee (or Director if the
			 principal balance does not exceed $250,000), with any additional terms and
			 conditions, including interest rate, that it may determine. A new application,
			 including an application fee and supporting documentation, are required to
			 initiate review of the request.
(f)
			 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, declare the
			 entire outstanding indebtedness to be forthwith due and payable and assign the
			 loan to the Attorney General for collection; The Finance Committee or the
			 Director or their designee is authorized to approve any modification of terms
			 on a loan that is delinquent or in default as deemed necessary or prudent to
			 most likely effect repayment of the loan to the Fund.