15 CAR § 71-110 – Loan insurance

(a) The Arkansas Development Finance Authority may insure up to ninety percent (90%) of a loan, with a not to exceed maximum loan insurance amount of fifty thousand dollars ($50,000).
(b)
1. (1) Should a business that is the subject of an insured loan default or otherwise be unable to make loan payments, the authority would pay the lender up to ninety percent (90%) of the deficiency.
2. (2) The balance of any loss is absorbed by the lender.
(c) Loan payments and the proceeds of any collateral are applied pro rata to the insured and uninsured portion of the loan.
(d) The authority’s obligation would be limited to a payment of the insured percentage of a loan times the amount of principal, accrued interest, and the lender's reasonable costs of collection, exclusive of costs attributed to environmental problems, remaining unpaid after liquidation of collateral up to the lesser of:
1. (1) Fifty thousand dollars ($50,000); or
2. (2) An amount equal to the insured percentage of the original loan amount authorized in the loan authorization agreement.
(e) On a case-by-case basis the Board of Directors of the Arkansas Development Finance Authority may approve bank loan guarantees in excess of the aforementioned limits.