Section 457-3-4 - Criteria and ConsiderationsA. No application for a Certificate of Approval for a proposed project seeking a commitment of the moral obligation of the State will be approved unless the borrower, or the borrower and guarantor combined, meets or exceeds the following financial performance and collateral criteria, as determined by the Authority (provided that new ventures are not ineligible, but must clearly demonstrate the ability to be profitable or otherwise show on a pro forma basis the ability to satisfy the following criteria, as applicable): 1. Profitability for the most recent three years of operations, if available;2. Minimum ratio of current assets to current liabilities of 1.25 to 1;3. Maximum ratio of total debt to net worth of 3 to 1;4. Minimum debt service coverage ratio of 1.25 to 1 (net income after taxes, plus interest and depreciation, divided by annual debt service, both current and proposed);5. Recent financial performance consistent with the applicable median quartile of firms in comparable businesses as reported in RMA Annual Statement Studies, if available.6. Sufficient collateral on a discounted basis In its discretion, the Authority may waive one or more of the above criteria if the Authority determines that the borrower has demonstrated a strong likelihood of being able to repay the loan, or in the event that the borrower causes to be provided to the Authority an irrevocable letter of credit or other similar instrument or undertaking which the Authority deems sufficient to provide adequate third party security for repayment of the loan and which is in form and content satisfactory to the Authority.
B. For all projects requiring financing in excess of $1,000,000 and in other instances where the authority determines it is appropriate, the authority shall obtain a written assessment from the Department of Environmental Protection of the environmental conditions known by the department to exist at a project location.94- 457 C.M.R. ch. 3, § 4