D.C. Mun. Regs. tit. 26, r. 26-C2913

Current through Register Vol. 71, No. 49, December 6, 2024

Rule 26-C2913 - LOAN REQUIREMENTS - LOAN PARTICIPATION PROGRAM

2913.1

Loans facilitated by the Loan Participation Program shall be used for a business purpose, including working capital, inventory, expansion, renovations, start-up costs, and refinancing. The entire proceeds of the loan or investment shall be used within the District.

2913.2

The loan proceeds from the Loan Participation Program shall not be used:

(a) To repay delinquent federal or District of Columbia income taxes unless the Eligible Recipient has a payment plan in place with the relevant taxing authority;

(b) To repay taxes held in trust or escrow, for example, payroll or sales taxes;

(c) To reimburse funds owed to any owner, including any equity injection or injection of capital for the business's continuance;

(d) To purchase any portion of the ownership interest of any owner of the business;

(e) To acquire or hold passive investments;

(f) For refinancing of existing debt, other than a refinancing permitted by § 2914.13;

(g) For legal or illegal gambling; or

(h) For evangelizing, proselytizing, or lobbying.

2913.3

Personal guarantees are required from any individual holding twenty percent (20%) or more ownership interest in the Eligible Recipient.

2913.4

An Eligible Lender shall apply to file a loan for enrollment in the Loan Participation Program by:

(a) Delivering to DISB, a copy of the District SSBCI Program Enrollment Form executed by an authorized officer of the Eligible Lender;

(b) Delivering to DISB documentation of the residency of the Eligible Recipient's employees;

(c) Providing DISB with any other documentation or information related to the loan that DISB requires; and

(d) Complying with any other enrollment procedures that DISB may reasonably require in writing.

2913.5

DISB shall review the loan and related transaction documents that memorialize the terms and conditions of the loan, and DISB shall issue a final approval if the loan, Eligible Lender, Eligible Recipient, and other aspects of the transaction are determined to comply and satisfy all applicable requirements.

2913.6

If DISB issues a final approval of the loan, the Eligible Lender and Eligible Recipient shall execute all documentation requested by DISB to memorialize the terms and conditions of the loan to be enrolled in the Loan Participation Program.

2913.7

The Eligible Lender, Eligible Recipient, and all other parties to the transaction shall execute all of the documents required to close or settle the transaction. The terms, conditions, and material language of the executed documents shall be consistent with those upon which DISB issued a final approval.

2913.8

The loan shall be considered enrolled in the Loan Participation Program when DISB receives copies of all executed transaction documents that it previously approved and submits a funding request to the Office of the Chief Financial Officer.

D.C. Mun. Regs. tit. 26, r. 26-C2913

As amended by Final Rulemaking published at 61 DCR 9181 (September 5, 2014); amended by Final Rulemaking published at 63 DCR 11535 (9/16/2016)