1. (a) A direct loan shall not be made in an amount less than twenty-five thousand dollars ($25,000.00), and the total outstanding balance of direct loans to any one borrower, including principal and interest, shall not exceed two million dollars ($2,000,000).

2. (b) The total amount of a direct loan shall not exceed fifty percent (50%) of the applicant's total investment in the project.

   1. (1) “Investment” means the total cost paid or incurred by the applicant in constructing, renovating, or acquiring a facility, and for related equipment and fixtures
   2. (2) If the applicant is also receiving a guaranty provided pursuant to this subchapter for the same project, the direct loan amount shall not exceed twenty percent (20%) of the investment.
3. (c) Not more than fifty percent (50%) of the total amount of the direct loan allowed in subsection (b) may be used to refinance existing debt. Refinancing shall only be permitted if it will enhance the applicant's creditworthiness by enhancing security for repayment of the loan, and/or by enhancing the applicant's cash flow.

In addition to the terms and conditions set forth in Article 2 of this subchapter, direct loans shall also be subject to all of the following conditions:

Note: Authority cited: Section 8277.6(g), Education Code. Reference: Sections 8277.5(e)(2), 8277.6(b) and (g), Education Code.

History

1. New article 4 (sections 8264-8272) and section filed 4-16-99 as an emergency; operative 4-16-99 (Register 99, No. 16). A Certificate of Compliance must be transmitted to OAL by 10-13-99 pursuant to Education Code section 8277.6 or emergency language will be repealed by operation of law on the following day.

2. New article 4 (sections 8264-8272) and section refiled 10-1-99 as an emergency; operative 10-13-99 (Register 99, No. 40). A Certificate of Compliance must be transmitted to OAL by 2-10-2000 or emergency language will be repealed by operation of law on the following day.

3. Repeal of article 4 (sections 8264-8272) and section by operation of Government Code section 11346.1(g) (Register 2000, No. 9).

4. New article 4 (sections 8264-8272) and section filed 2-2-2001; operative 2-2-2001 pursuant to Government Code section 11343.4(c) (Register 2001, No. 5).