La. Admin. Code tit. 19, § VII-511 - General Guaranty Agreement Provisions
A. Guaranty Agreement
1. The lending institution shall conduct all
of the customer/borrower interaction, and shall be responsible for the proper
administration and monitoring of the loan or line of credit, including monthly
invoicing, collections, and loan workouts, and the proper liquidation of the
collateral in the event of a default.
2. The loan or line of credit shall not be
sold, assigned, participated out, or otherwise transferred without the prior
written consent of the LEDC board.
3. If liquidation through foreclosure occurs,
the lender will sell the collateral, handle the legal proceedings, and absorb
all expenses associated with these activities.
4. There will be a reduction of the
guarantee:
a. in proportion to the principal
reduction of the amortized portion of the loan or line of credit;
b. if no principal reduction has occurred in
any annual period of the loan or line of credit, a reduction in the guarantee
amount will be made proportional to the remaining guarantee life.
5. The guarantee will cover the
unpaid principal amount owed only.
6. Delinquency will be defined according to
the lender's normal lending policy and all remedies will be outlined in the
guarantee agreement. Notification of delinquency will be made to the
corporation in writing by submitting a completed, signed and dated SBLGP banker
loan status monthly report within five business days after the end of the
month/reporting period as stated in the guaranty agreement.
B. Loan Participation Agreement
1. The lending institution shall conduct all
of the customer/borrower interaction, and shall be responsible for the proper
administration and monitoring of the loan, including monthly invoicing,
collections, and loan workouts, and the proper liquidation of the collateral in
the event of a default.
2. The lead
lender will hold no less participation in the loan than that equal to LEDC's,
but not to exceed its legal lending limit.
3. The lead lender may sell other
participations with LEDC's consent.
4. Should liquidation through foreclosure
occur, the lender will sell the collateral and handle the legal proceedings and
absorb all expenses associated with these activities.
5. The lender is able to set its rate
according to risk, and may blend its rate with the LEDC rate to yield a lower
overall rate to a project.
6.
Delinquency will be defined according to the lender's normal lending policy and
all remedies will be outlined in the participation agreement. Notification of
delinquency will be made to the corporation in writing by submitting a
completed, signed and dated SBLGP banker loan status monthly report within five
business days after the end of the month/reporting period, as stated in the
loan participation agreement.
C. Borrower Agreement
1. At the discretion of LEDC, the borrower
will agree to strengthen management skills by participation in a form of
continuing education acceptable to LEDC.
2. The borrower shall provide initial proof
as well as an annual report of job creation, including the number of jobs, job
titles and salaries.
Notes
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