2 CSR 100-7.010 - Description of Operation, Definitions, Borrower Requirements, Procedures for Making and Collecting Loans and Amending the Rules for the Missouri Value-Added Loan Guarantee Program
(1) General Organization.
(A) The Missouri Agricultural and Small
Business Development Authority is authorized to borrow money and issue bonds,
procure insurance or guarantees from any public or private entities, receive
and accept from any source aid or contributions of money, property, labor, or
other things of value to be used to carry out its purposes, enter into
agreements with any department, agency, or instrumentality of the United States
or this state for the purpose of providing for the financing and refinancing of
any agricultural property and pollution control facilities or general property
for small businesses, and to make agricultural development loans, small
business development loans, small business pollution control facility loans,
and agricultural products utilization grants.
(B) The authority will issue certificates of
guaranty covering a first loss guarantee up to fifty percent (50%) of the loan
on a declining principal basis made by lenders to eligible borrowers for the
purpose of financing an agricultural business development loan.
(C) All submissions or requests for
information regarding this authority should be directed to the Missouri
Department of Agriculture, Agricultural and Small Business Development
Authority, PO Box 630, Jefferson City, MO 65102.
(2) Definitions. As used in this rule, the
following terms shall mean:
(A) "Certificate
of guaranty," evidence of obligation of the authority to guarantee up to but no
more than fifty percent (50%) of the loan on a declining principal basis made
by lenders to eligible borrowers for the purpose of financing an agricultural
business development loan;
(B)
"Missouri Value-Added Loan Guarantee Program," the agricultural business
development loan guarantee program authorized in section
348.403, RSMo; and
(C) Other terms used within 2 CSR 100-7 shall
have the same meaning as those defined in section
348.400,
RSMo.
(3) Criteria
Relating to Participating Borrowers and Missouri Value-Added Loan Guarantee
Program.
(A) Eligibility requirements for
securing guaranteed agricultural business development loans include:
1. An individual borrower must be at least
eighteen (18) years of age in order to execute a note or other evidence of an
agricultural business development loan;
2. Any agricultural property being financed
must be located in Missouri and used by residents of the state or by Missouri
based businesses for intended purposes and meet requirements as outlined in
sections 348.400 to
348.415, RSMo;
3. An eligible borrower must provide the
following:
A. Favorable lender and authority
loan analysis of borrower's ability to repay the loan and the prospect of the
project's success;
B. Viable
business plan;
C. Appropriate
security provided for the loan;
D.
Appropriate risk retained by borrower for project;
E. Appropriate risk retained by lender for
project;
F. Business compatibility
with and evidence of support by community;
G. Managerial and business
experience;
H. Compliance with
federal, state, and local requirements;
I. Benefit to the general economic conditions
of the area in which the agricultural property will be located; and
J. Appropriate term of the loan guarantee
requested in relation to the expected life of assets being guaranteed;
and
4. The eligibility of
any person for a loan guarantee under the program shall not be determined or
otherwise affected by any consideration of that person's race, religion, sex,
creed, color, or location of residence, other than an individual borrower must
be a resident of the state of Missouri at the time the loan is closed and other
borrowers must be an eligible borrower as defined in section
348.015,
RSMo.
(B) The term for a
certificate of guaranty may not exceed the expected life of assets being
guaranteed and may not exceed a period of ten (10) years.
(C) Loan guarantees made under the program
may not apply to refinancing of loans. The authority may make an exception in
the case of an expansion of an existing business operation when a significant
portion of the loan is new debt.
(D) Loans made under the program may not be
assumed by another person(s) or entity or be assigned by the lender without
prior approval of the authority.
(E) Loans made under the program may not be
extended beyond the original time established for the loan without prior
approval of the authority.
(F) The
rate of interest to be charged to a borrower will be negotiated between the
lender and the borrower, but cannot exceed the rate normally charged by the
lender for similar loans.
(G) The
loan amortization schedule will be negotiated between the lender and the
borrower. Payments may be repaid monthly, quarterly, semiannually, annually or
in installments that coincide with payments as they are normally received for
the products being sold or delivered.
(H) Borrowers may accelerate payments,
including early pay-off of the loan without incurring a prepayment
penalty.
(4) Procedure
for Making Eligible Loans.
(A) Borrowers
wishing to secure a loan through the program must apply for a loan from a
participating eligible lender.
(B)
A participating lender must make its own determination of whether a prospective
borrower meets its requirements for a loan for which the lender will be
applying for a loan guarantee.
(C)
A lender seeking a guarantee through the program must submit to the authority
an application and any supporting documents required by the
authority.
(D) Upon receipt of the
application and supporting documents, the authority will determine whether the
loan constitutes an agricultural business development loan guarantee program
loan and whether the borrower is an eligible borrower. The authority may reject
any application for guaranty.
(E)
Each application will be considered individually by the authority. A decision
to accept, modify or deny each will be released.
(F) The decision by the authority is binding
and not subject to review or appeal.
(G) Upon approval and determining that all
requirements for the loan guarantee are met, the authority will issue to the
lender a certificate of guaranty for up to fifty percent (50%) of any loss of
the loan amount on a declining principal basis, and for a period not to exceed
ten (10) years.
(5)
Procedure for Collecting Loans.
(A) Eligible
lenders must apply normal due diligence procedures in the collection of loans
guaranteed through the program.
(B)
Eligible lenders making the original loan shall use its regular collection
procedures prior to requesting the authority to pay the guarantee on the
outstanding principal.
(C) After a
lender has foreclosed upon a borrower who has defaulted on a loan made through
the program, the authority will reimburse the lender for any loss up to fifty
percent (50%) of the principal outstanding.
(D) When the authority makes payment to a
lender for losses on a defaulted loan, the authority shall be subrogated to all
rights of the eligible lender.
(E)
After making a loan loss payment, the authority may institute action, including
the use of private collection agencies, to recover any amount due the
state.
(F) All moneys received by
the authority for payments made on previously defaulted guaranteed loans shall
be paid promptly into the state treasury and deposited in the agricultural
product utilization and business development loan guarantee fund.
(6) Amendments.
(A) Subject to the provisions of the Act and
the program, these guidelines may be amended from time-to-time in order to make
them conform to the provisions of the Act or the program or to facilitate the
making of agricultural business development loan guarantee program
loans.
Notes
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