15 CAR § 71-111 – Loan insurance agreement

(a) No loan authorization shall be effective unless the lender and the Arkansas Development Finance Authority have executed a loan insurance agreement in a form acceptable to the authority setting forth the relative rights and responsibilities of the lender and the authority for all insured loans.
(b) The loan insurance agreement shall include without limitation the following:
1. (1) General conditions and provisions incorporating the requirements of this section and the Arkansas Development Finance Authority Small Business Act of 1989, Arkansas Code § 15-5-701 et seq.;
2. (2) Provisions setting forth the responsibilities of the lender to prudently underwrite and service insured loans in such a manner as would be the normal and customary practice of a prudent lender making or servicing a loan without relying on loan insurance;
3. (3)
  1. (A) A requirement that the lender notify the authority in writing within five (5) business days after knowledge of a default.
  2. (B) Upon default, the lender and/or authority shall take such action as may be prudent, including without limitation repossessing and liquidating or foreclosing on collateral; and
4. (4) A description of the authority’s insurance programs and the method for paying insurance claims.