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(a) The division will purchase a participation in a loan with money from the fund only if (1) the borrower is an eligible borrower as described in (c) of this section and (2) the proceeds of the loan will be used by the borrower for working capital, equipment, construction costs, or other commercial purposes relating to the borrower's business. For the purposes of this subsection, the division does not consider the use of the loan proceeds to refinance another loan to be for any of the purposes described in this subsection. In addition to the other provisions of this subsection, the division will purchase a participation in a loan only if (1) the borrower's principal place of business is located within a rural community in the state or if the borrower verifies to the satisfaction of the division that the primary beneficiaries of the loan will be residents of a rural community in the state; (2) the loan is made to pay costs described in this subsection which were incurred by the borrower no earlier than six months before the loan application described in 3 AAC 170.030 was filed with the division. For the purposes of this subsection, a "rural community in the state" means a community with a population of 5,000 or less.
(b) In addition to the limitations stated in (a) of this section, the division will purchase a participation in a loan only if the division concludes, based upon the information available to it, that the loan will result in new job creation or the retention of existing jobs in the community described in (a) of this section.
(c) A borrower is eligible for a loan for purposes of (a) of this section if the division has received information that it determines is sufficient to make a determination as to the borrower's creditworthiness and, based upon that information, determines that the borrower will be able to repay the loan in accordance with its terms.
(d) The division will not purchase a participation in a loan with money from the fund if the borrower has an outstanding loan in which the division has purchased a participation with money from the fund.
(e) The division will not purchase a participation in a loan with money from the fund unless the loan bears interest at the rate described in 3 AAC 170.080, is secured by collateral as described in 3 AAC 170.100, contains terms and conditions as described in 3 AAC 170.110, and otherwise complies with the requirements of AS 44.33.765 - 44.33.780 and this chapter.
History: Eff. 1/19/93, Register 125; am 6/13/93, Register 126
Authority: AS 44.33.765
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Last modified 7/05/2006