Md. Code Regs. 24.05.04.07

Current through Register Vol. 51, No. 24, December 2, 2024

Section 24.05.04.07 - Loan Insurance Application and Processing Procedures

A. Loan Insurance Application. Loan insurance applications shall be made upon standard forms prescribed by the Authority. Each application shall include the following documentation:

(1) A fully completed and properly executed application;

(2) A copy of the articles of incorporation, bylaws, partnership agreement, or other organizational documents;

(3) A detailed description of the proposed use or uses of the proceeds of the loan including projected cash flow analyses, marketing plans, or descriptions and appraisals;

(4) Information that relates to the financial status of the applicant, including:

(a) Annual financial statements prepared in accordance with generally accepted accounting principles for 3-5 of the most recent years,

(b) A current balance sheet,

(c) A recent profit and loss statement,

(d) Financial projections for the next 3 years,

(e) Credit references,

(f) Personal financial statements of any individual applicants and personal guarantors, and

(g) The status of outstanding indebtedness;

(5) A detailed description of the applicant's experience in the trade or business for which the loan and insurance are sought;

(6) Information that relates to the economic impact to be created by the loan; and

(7) Any other relevant information that the Authority requests.

B. Processing of Application.

(1) After execution of the application, the applicant shall submit it to the Authority along with a copy of an executed commitment letter from the lender to provide financing which, at the minimum, shall state the amount, rate, and terms of the financing or a letter of intent from the lender on a form prescribed by the Authority.

(2) Each application shall be subject to an initial review to make a preliminary determination of the eligibility of the applicant and the project in accordance with these regulations.

(3) Each application shall be submitted to the Authority for review by its staff at least 14 business days before any Authority meeting date.

C. Approval. Approval of insurance shall be evidenced by a signed resolution of the Authority. The Authority is not obligated to take further action after approval of a resolution until an applicant executes and returns a copy of the lender's commitment letter.

Md. Code Regs. 24.05.04.07