1. (a) Applicants for NMTC leverage loan products must first apply to the authority for a loan guarantee that is intended to induce a private lender to make a leveraged loan into the NMTC transaction, In the event that the applicant cannot obtain a loan on commercially reasonable terms even with the existence of the guarantee, the applicant may request that the authority make the loan.

2. (b) To apply for NMTC leverage loan products, an applicant shall file with the authority a completed application on a form provided by the authority and shall include or attach the following information:

   1. (1) a letter of transmittal stating the amount of the guarantee or loan being requested and intended use of the loan proceeds;
   2. (2) a financial statement from each applicant, including each member of a partnership or other association that constitutes the applicant, or, if the applicant is a corporation, each shareholder owning 20 percent or more of any outstanding shares;
   3. (3) a business financial statement;
   4. (4) a project development schedule, if applicable;
   5. (5) evidence of insurance, unless waived by the authority; the applicant shall obtain insurance coverage for the improvements on the real property from responsible companies in such amounts and against such risks as is satisfactory to the authority, and an American Land Title Association title insurance loan policy is required if real property is involved;
   6. (6) a statement of projected income and expenses for the following year's operating plan;
   7. (7) the applicant's profit and loss statement;
   8. (8) a projected profit and loss statement;
   9. (9) applicant background information;
   10. (10) credit authorizations for at least three of the applicant's creditors;
   11. (11) authorizations to verify financial information and other consents to release information;
   12. (12) signed copies of the applicant's federal income tax returns for the preceding three years, including returns for each member of a partnership or other association, and for additional years if requested by the authority;

   13. (13) a description and evaluation of any collateral to be used to secure the guarantee:

       1. (A) if the NMTC financing is to be used to finance real property, a written appraisal report acceptable to the authority estimating the fair market value of the real property; the appraisal shall be a self-contained appraisal report prepared in accordance with the most current edition of the Uniform Standards of Professional Appraisal Practice established by the Appraisal Standards Board of The Appraisal Foundation;
       2. (B) if the NMTC financing is to be used to finance tangible personal property, an appraisal in a format acceptable to the authority prepared by an appraiser who is acceptable to the authority;
   14. (14) any documents needed for the authority to make a finding that the borrower has adequate projected cash flow to service the debt;
   15. (15) an environmental risk assessment satisfactory to the authority, followed by an environmental audit if required by the authority; and
   16. (16) any other information the authority considers necessary to evaluate the borrower and the project.

3. (c) The application for a guarantee of a loan to refinance existing debt must contain the items described or listed in (b) of this section and must also contain the following:

   1. (1) a debt schedule that

      1. (A) correlates to the project's or activity's latest balance sheet; and
      2. (B) reflects the debt to be refinanced, including name of the creditor, original loan amount and loan balance, date of loan, and maturity date, together with statements as to whether the loan is paid monthly, annually, or otherwise, as to payment status and payment history of the loan, and as to the collateral securing the loan;

   2. (2) an evaluation completed by the financial institution explaining how the guarantee of a loan to refinance existing debt will satisfy the following:

      1. (A) is necessary to extend substantial debt payments over a longer period of time, thereby improving the applicant's net cash flow and working capital position consistent with the useful life of the assets being refinanced;
      2. (B) assists with short-term debt or cash expenditures when lenders will not extend reasonable longer terms to the applicant; and
      3. (C) creates additional economic opportunity or improves the viability of the project, business, or nonprofit activity rather than just reducing the liability of the lender; or
      4. (D) is necessary to place a permanent loan subsequent to an interim loan for financing the project; and
   3. (3) a statement by the financial institution whether the loan being refinanced has been criticized or classified by any regulatory agency or internal audit as a high-risk or under-collateralized loan.
4. (d) The authority may process NMTC financing requests without the information described in this section if the authority determines that such information is not necessary for making the loan guarantee decision.

(Eff. 3/29/2013, Register 207)