N.Y. Comp. Codes R. & Regs. tit. 21 § 4243.4

Current through Register Vol. 46, No. 50, December 11, 2024

Section 4243.4 - General terms and conditions

Program assistance shall not be provided to ineligible recipients. Program assistance shall generally be offered on the applicable terms and conditions set forth below, in the other provisions of this Part and as more specifically set forth in the sections of this Part for each type of program assistance.

(a) Loans and loan guarantees. With respect to program loans and loan guarantees:

(1) Within the limitations established hereunder, terms and security arrangements will be flexible, depending on the type of loan and the particular characteristics of the project under consideration. Loans that provide permanent financing and are secured by a letter of credit or fixed assets will be preferred.

(2) Interest rates on loans will be set at the time the corporation's directors approve an application. Rates and terms will be determined based upon what is necessary to make the project feasible, and will reflect market conditions, the borrower' s ability to repay and project requirements. The interest rate established for any loan generally will not be lower than three percent.

(3) Loans and loan guarantees generally will be made under the following terms:

(i) Loans made or guaranteed for the purpose of financing the acquisition of real property or the acquisition, renovation or construction of facilities may be made for a term not to exceed 20 years, provided that loan guarantees for such purposes shall generally be for no more than 60 percent of the loan being guaranteed or $2,000,000, whichever is less. In a co-equal and coordinate mortgage situation, a mortgage granted to the corporation will match the term of the other mortgage.

(ii) Loans made or guaranteed for the purpose of financing the acquisition of machinery and equipment may be made for a term of up to seven years or the useful life of the collateral, whichever is less, provided that loan guarantees for such purpose shall generally be for no more than 60 percent of the loan being guaranteed or $2,000,000, whichever is less.

(iii) Working capital loans made or guaranteed may be for a term of up to four years to finance capital-related expenses, including, without limiting the foregoing, accounts receivable and inventory, provided that working capital loan guarantees shall generally be for no more than 60 percent of the loan being guaranteed or $2,000,000, whichever is less.

(iv) Except as otherwise set forth in this Part, loans shall generally not exceed 40 percent of the total project costs.

(4) Standard repayment terms generally will include level debt service payments over the term of the loan. In certain circumstances, deferred or graduated payments may be permitted, provided that the loan is fully amortized over the remainder of the loan term.

(5) Generally, the corporation shall require guarantees of a program loan or loan guarantee from shareholders that own 20 percent or more of the shares of the borrower and in other situations deemed appropriate by the corporation to adequately secure a loan and loan guarantee obligations.

(b) Loans, loan guarantees, and grants, including interest subsidy grants. For all program loans, loan guarantees, and grants, including, without limiting the foregoing, interest subsidy grants:

(1) Commitments shall be in writing only and shall be conditioned upon receipt by the corporation of program monies to fund such commitment.

(2) Before or simultaneously with the disbursement of an interest subsidy grant, the loan being subsidized must be funded and the appropriate documentation evidencing the same must be submitted.

(3) Interest subsidy grants will generally be made directly to a lending institution and shall generally be for five years. The corporation may, in its sole discretion, elect to make interest subsidy grant payments directly to a grantee.

N.Y. Comp. Codes R. & Regs. Tit. 21 § 4243.4