La. Admin. Code tit. 19 § VII-7601

Current through Register Vol. 50, No. 11, November 20, 2024

Section VII-7601 - Purpose

A. The Louisiana Economic Development Corporation (LEDC) wishes to stimulate the flow of private capital, short term loans, lines of credit loans, and other financial assistance through a mission driven focus in creating a revolving loan fund for the sound financing of the development, expansion, and retention of small business concerns in Louisiana as a means of helping to start or grow their business and of providing employment, income growth, and expanded economic opportunities, especially to Small Businesses owned by Socially and Economically Disadvantaged Individuals (SEDI) and to those Very Small Businesses (VSB).

B. Through the American Rescue Plan Act of 2021, which reauthorized the State Small Business Initiative (SSBCI), the U.S. Congress has appropriated funds to be allocated and disbursed to the states that have created programs to increase the amount of capital made available by private lenders to small businesses, and the State of Louisiana has been approved to receive and disburse SSBCI funds within the SSBCI Program. The Louisiana Department of Economic Development, which will be working with and through LEDC, has been designated to provide services for the SSBCI, including the Micro Lending Program (MLP), which by a Program Participation Agreement previously entered into, between LEDC and the Lender to make additional capital available for the loan. The LEDC will utilize SSBCI funds to increase access to credit and capital funding to further assist small businesses statewide, to expand loan capabilities to a broader range of businesses statewide, to direct a greater concentration to those small businesses, and to reach, identify and promote small business growth in low and moderate income communities, in minority communities, in other underserved communities, and to small businesses owned by socially and economically disadvantaged individuals across our state..

C. By partnering with Louisiana CDFIs and other qualifying lenders who share a similar mission driven focus as the purpose of this program, LEDC will provide funding to participating CDFIs, and other qualifying lenders having been approved as a participating lender, for the purpose of making direct loans up to $100,000 to small businesses meeting the SSBCI criteria as outlined in the program participation agreement.

D. Interested small businesses will be referred to participating Lenders for loan qualification purposes. Participating Lenders will apply to LEDC for acceptance to enroll a loan or line of credit under the Program on behalf of their qualified small business borrowers. Participating Lenders are responsible for their own credit underwriting decisions and originating the loans. LEDC's responsibility is: to ensure compliance with the Micro Lending Program requirements; ensure compliance with the SSBCI requirements as directed by Treasury, as well as participation in the program; and to report to the U.S. Treasury.

E. In considering acceptance of the loans presented to LEDC through Lenders having agreed to participate in the Micro Lending Program, the Corporation will consider sound business purpose loans and lines of credit, so long as SSBCI resources permit. The board of directors of the corporation recognizes that loan participations carry certain risks and are willing to undertake reasonable exposure.

F. LEDC will monitor the program, including the repayment progress of borrowers, as well as the servicing performance of participating lenders, in order to ensure successful outcomes in the form of program utilization and eventual securing of funds for these groups.

La. Admin. Code tit. 19, § VII-7601

Promulgated by the Department of Economic Development, Office of Business Development and the Louisiana Economic Development Corporation, LR 481479 (6/1/2022), Amended LR 481920 (7/1/2022).

AUTHORITY NOTE: Promulgated in accordance with R.S. 36:104, 36:108 and 51:2312