Section 4015 - Small Business Loan Agreement and Guarantee Terms(a) The terms and conditions of a Loan Agreement to a Small Business shall include all of the following: (1) Except for an Extended Guarantee, as defined in subsection (b)(6), the maximum interest rate shall be determined based upon the percentage of the Loan which is guaranteed by a Corporation, as set forth below in subsections (A) through (D). The interest rate for an Extended Guarantee shall not exceed Prime plus two percent. (A) If the percentage guaranteed is 95 percent, the maximum Loan interest rate shall be Prime;(B) If the percentage guaranteed is 90 percent, the maximum Loan interest rate shall be Prime plus one percent;(C) If the percentage guaranteed is 85 percent, the maximum Loan interest rate shall be Prime plus two percent;(D) If the percentage guaranteed is 80 percent, the maximum Loan interest rate shall be Prime plus three percent;(2) If the Borrower receives a Federal Disaster Loan, all proceeds from the Federal Disaster Loan shall be used to reduce the Loan, to the extent allowed by law.(3) The Lender shall be authorized to charge reasonable administrative loan fees.(4) In the case of a Loan with an Extended Guarantee, as defined in subsection (b)(6), the Loan shall be fully amortized. As used in this subsection, "fully amortized" means that periodic and equal interest and principal payments are due throughout the term of the Loan.(b) The terms and conditions of a Guarantee shall be consistent with the resolution of the Corporation approving the Guarantee and shall include all of the following: (1) The Corporation promises to pay up to 95 percent of the Loan principal and interest (100 percent if the conditions of subclause (2) below are met) in the event of a Default, subject only to the following restrictions:(A) Such amount does not exceed a total of $150,000 principal, plus the interest on the guaranteed portion of the Loan.(B) The Lender has complied with any conditions contained in the resolution adopted by a Corporation's board of directors authorizing the Guarantee; provided, however, that this restriction only shall apply to the extent that the conditions in such resolution are expressly set forth in the Guarantee; and(C) The Lender has not engaged, and will not engage, in fraudulent or grossly negligent practices in connection with the Borrower, Guarantee, the Loan or the Loan Agreement.(2) In the case of a Loan to a Small Business, the Guarantee shall include a promise to repay up to 100 percent of the Loan interest and principal if access to business records pertinent to the Application for a Loan has been precluded by official action prohibiting necessary reentry into the affected business premises. Evidence of the above shall consist of a written statement of the Lender, Corporation, or public official confirming the denial of access. In addition, the Borrower shall also specify in writing the relevant records within the business premises, and certify that no other copies of such records exist.(3) Neither the terms of the Guarantee nor the Loan shall be amended without the prior written approval of the Borrower, Lender and the Corporation executing the Guarantee.(4) The Lender shall make a good faith effort to send to the Corporation executing the Guarantee, a copy of all correspondence mailed to the Borrower.(5) Section 4013 Demand Procedures.(6) The original term of a Guarantee shall not exceed twelve (12) months. A Corporation is authorized to extend the term of a Guarantee upon expiration of the initial twelve (12) month term so long as a Federal Disaster Loan Application is still pending. The extension shall continue only so long as the Application remains pending. If a Federal Disaster Loan Application is denied, a Corporation is authorized to issue a Guarantee for a new Loan for a term not to exceed seven years. The amount of the new Loan shall not exceed the total owing on the previous Loan as of the date the Application was denied. A Guarantee issued after an Application has been denied is defined as an "Extended Guarantee." No Extended Guarantee shall be issued unless the Corporation obtains and reviews updated financial and credit information concerning the Borrower. The Corporation is only required to review information which updates financial and credit information contained in the original Application.(7) No Corporation shall be authorized to charge a Guarantee fee for issuing a Small Business Guarantee, except for the issuance of an Extended Guarantee, as defined in subsection (b)(6). A Corporation shall be authorized to charge a fee of up to one percent of the Guarantee amount in the case of an Extended Guarantee.Cal. Code Regs. Tit. 10, § 4015
1. Renumbering and amendment of section 4012 to section 4015 filed 3-22-91 as an emergency; operative 3-22-91 (Register 91, No. 16). A Certificate of Compliance must be transmitted to OAL by 7-22-91 or emergency language will be repealed by operation of law on the following day.
2. Editorial correction of printing error in subsection (a)(2) (Register 91, No. 32).
3. Repealer and new section filed 3-19-92 as an emergency; operative 3-19-92 (Register 92, No. 15). A Certificate of Compliance must be transmitted to OAL 7-17-92 or emergency language will be repealed by operation of law on the following day.
4. Renumbering of former section 4015 to section 4615 and new section 4015 filed 6-2-92; operative 6-2-92 (Register 92, No. 24).
5. Amendment of subsection (b)(1)(A) and NOTE filed 8-10-92 as an emergency; operative 8-10-92 (Register 92, No. 33). A Certificate of Compliance must be transmitted to OAL 12-8-92 or emergency language will be repealed by operation of law on the following day.
6. Order of 8-10-92 repealed by operation of Government Code section 11346.1 (Register 94, No. 17).
7. Editorial correction of subsections (a)(1)(D), (b)(1), and (b)(2) (Register 95, No. 13). Note: Authority cited: Section 14075(b), Corporations Code. Reference: Section 14075(a), Corporations Code; and section 8684, Government Code.
1. Renumbering and amendment of section 4012 to section 4015 filed 3-22-91 as an emergency; operative 3-22-91 (Register 91, No. 16). A Certificate of Compliance must be transmitted to OAL by 7-22-91 or emergency language will be repealed by operation of law on the following day.
2. Editorial correction of printing error in subsection (a)(2) (Register 91, No. 32).
3. Repealer and new section filed 3-19-92 as an emergency; operative 3-19-92 (Register 92, No. 15). A Certificate of Compliance must be transmitted to OAL 7-17-92 or emergency language will be repealed by operation of law on the following day.
4. Renumbering of former section 4015 to section 4615 and new section 4015 filed 6-2-92; operative 6-2-92 (Register 92, No. 24).
5. Amendment of subsection (b)(1)(A) and Note filed 8-10-92 as an emergency; operative 8-10-92 (Register 92, No. 33). A Certificate of Compliance must be transmitted to OAL 12-8-92 or emergency language will be repealed by operation of law on the following day.
6. Order of 8-10-92 repealed by operation of Government Code section 11346.1 (Register 94, No. 17).
7. Editorial correction of subsections (a)(1)(D), (b)(1), and (b)(2) (Register 95, No. 13).