8.99.505    DEVELOPMENT LOAN - MATCHING CONTRIBUTIONS

(1) MBDC matching loan funds, in the ratio of at least $1 from the MBDC for each $6 of development loan funds provided by the department, must be provided in cash.

(2) The full amount of the MBDC's cash matching funds must be deposited in the revolving loan fund bank account before the development loan proceeds are deposited by the department in revolving loan fund bank account, except that, when the MBDC presents a legally binding commitment for cash matching funds from a federal agency contingent only upon disbursement of the development loan, the development loan may be disbursed prior to deposit of that committed federal portion of the cash matching funds.

(3) In order to assist a MBDC in obtaining cash matching funds from other sources, the department may provide a legally binding commitment to a MBDC to award a development loan, contingent on receipt and deposit of cash matching funds as specified in the loan agreement. Such a commitment will be made first to MBDCs with cash matching funds ready and available and then to MBDCs with strong evidence of commitments. Commitments to those developing cash matching funds must have an expiration date.

(4) All development loan and MBDC matching loan funds not invested in microbusiness loans must be deposited and maintained in the revolving loan fund bank account or the investment bank account at all times.

(5) MBDC matching loan funds must be deposited, invested, and lent together with the development loan proceeds, in the ratio of at least $1 from the MBDC for each $6 of development loan funds provided by the department, and must be used for only those purposes for which the development loan fund proceeds are used, as defined in 17-6-407, MCA.

(6) All development loan proceeds shall be used to establish a revolving loan fund from which loans made directly by the MBDC to microbusinesses and/or loans made directly by banks to qualified microbusinesses are guaranteed. The guarantee agreement between the bank and the MBDC must be approved by the department.

(7) The sum of the outstanding principal balance of the department development loan and the MBDC's matching loan funds is referred to as the "revolving loan fund base". The sum of the revolving loan fund bank account balance and investment bank account balance is referred to as the "revolving loan fund cash balance". The sum of the outstanding principal balance of all performing and delinquent microbusiness loans held by the MBDC in the revolving loan fund is referred to as the "eligible loan receivables balance". Restructured loans will be considered, on a case-by-case basis, in the calculation of the revolving loan fund base. All MBDCs shall report and document the revolving loan fund cash balance and the eligible loan receivables balance. The sum of the revolving loan fund cash balance and the eligible loan receivables balance must equal or exceed the "revolving loan fund base" at all times. If the sum of the revolving loan fund cash balance and the eligible loan receivables balance is less than the revolving loan fund base, this difference is referred to as the "revolving loan fund base deficiency". If a MBDC incurs a "revolving loan fund base deficiency," the MBDC shall deposit additional funds equal to or greater than the "revolving loan fund base deficiency" in the revolving loan fund bank account.

History: 17-6-406, MCA; IMP, 17-6-406, MCA; NEW, 1992 MAR p. 42, Eff. 1/17/92; AMD, 1993 MAR p. 2236, Eff. 10/1/93; AMD, 1996 MAR p. 2978, Eff. 8/9/96; AMD, 1998 MAR p. 466, Eff. 2/13/98; AMD, 2000 MAR p. 1045, Eff. 4/28/00; AMD, 2008 MAR p. 624, Eff. 3/14/08; AMD, 2011 MAR p. 1131, Eff. 6/24/11.