Wyoming Administrative Code › Agency 085 - Business Council › Sub-Agency 0010 - Community Development Block Grant › Chapter 2 - ECONOMIC DEVELOPMENT PROGRAM › Section 2-9 - Float and Section 108 Loan Guarantees

Current through July 13, 2024
(a) The Wyoming
				Business Council will accept economic development loan applications from
				qualified applicants under the CDBG float activity and the HUD administered
				section 108 loan guarantee program. A business must apply through an
				incorporated local government for assistance under the float program and the
				section 108 program.
(b) Float
				loans involve the use of CDBG funds for an economic development loan that will
				generate program income in time to carry out other activities listed in these
				rules. Use of this procedure is based on the premise that the later activities
				do not require funds immediately and that the recipient's (state) letter of
				credit will therefore contain a balance (the "float") that can be used on a
				temporary basis. Float loans shall be due on demand.
(c) The Section 108 Loan Guarantee program
				represents an activity where the Wyoming Business Council will accept
				applications directly from incorporated local governments on behalf of an
				eligible project. If approved, the Wyoming Business Council will then pledge
				future CDBG allocations as a guarantee to the loan, and submit the application
				to HUD for approval. As repayment is made by the borrower to HUD, the Wyoming
				Business Council's pledge amount will be decreased accordingly. The Wyoming
				Business Council may pledge up to an amount not to exceed five times the amount
				of the most recent CDBG grant received by the Wyoming Business Council. If a
				borrower defaults on a loan, the Wyoming Business Council will forfeit a
				portion of its future CDBG allocations. The term of a section 108 loan
				guarantee shall not exceed twenty (20) years.
(d) The minimum amount to be requested for a
				float or section 108 loan guarantees will be $350,000 and the maximum will be
				$1,500,000. These limits can be modified only in writing by the Chief Executive
				of the Wyoming Business Council. Interest rates for both will be based on the
				amount the company is able to pay and the public benefit to be
				derived.
(e) Applicants for float
				loans must be able to secure an unconditional and irrevocable letter of credit,
				drawn against a sound and acceptable financial institution payable to the
				Wyoming Business Council before CDBG funds will be disbursed. The purpose of
				the letter of credit is for the Wyoming Business Council to draw against in the
				event paybacks are delayed or the borrower has defaulted.
(f) Activities that are eligible for payment
				from either program are:
(i) Acquisition of
				real property;
(ii) Building
				construction;
(iii) Site
				improvements;
(iv) Acquisition or
				rehabilitation of machinery and equipment necessary for the operation of the
				project;
(v) Acquisition,
				rehabilitation and leasehold improvements of an existing facility;
(vi) Payment of professional fees --
				surveying, appraising, engineering, architectural, legal, accounting and
				closing costs. All fees must be determined to be legal and
				reasonable;
(vii) Working capital
				needs of the project.