1. (a) If the Eligible Commercial Financing Customer is accessing a Total Financed Amount of less than or equal to $10,000, the Finance Provider Entity performing the Underwriting role described in Section 10092.2(b)(1) must conduct a credit check of the Eligible Commercial Financing Customer utilizing a standard industry credit scoring service. Alternatively, the FPE may use 12 months of the Eligible Commercial Financing Customer's utility bill payment history from one of the IOUs to satisfy this requirement.

2. (b) If the Eligible Commercial Financing Customer is accessing a Total Financed Amount of greater than $10,000 and less than or equal to $350,000, the following requirements apply:

   1. (1) The Finance Provider Entity performing the Underwriting role described in Section 10092.2(b)(1) must conduct a credit check of the Eligible Commercial Financing Customer utilizing a standard industry credit scoring service. Alternatively, the FPE may use 12 months of the Eligible Commercial Financing Customer's utility bill payment history from one of the IOUs to satisfy this requirement.
   2. (2) The Eligible Commercial Financing Customer must not have filed for bankruptcy within the last five years or have any outstanding judgments or liens.

   3. (3) Eligible Commercial Financing Customer must meet any of the following criteria:

      1. (A) The Eligible Commercial Financing Customer shows a positive operating profit utilizing either EBIT or EBITDA, or positive taxable income for the last two years;
      2. (B) The Eligible Commercial Financing Customer has been in business at least five years; or
      3. (C) The Eligible Commercial Financing Customer provides a personal guarantee.

3. (c) If the Eligible Commercial Financing Customer is accessing a Total Financed Amount of greater than $350,000, all of the following requirements apply:

   1. (1) The Finance Provider Entity performing the Underwriting role described in Section 10092.2(b)(1) must conduct a credit check of the Eligible Commercial Financing Customer utilizing a standard industry credit scoring service. Alternatively, the FPE may use 12 months of the Eligible Commercial Financing Customer's utility bill payment history from one of the IOUs to satisfy this requirement;
   2. (2) The Eligible Commercial Financing Customer must not have filed for bankruptcy within the last five years or have any outstanding judgments or liens;
   3. (3) The Eligible Commercial Financing Customer must show a positive operating profit utilizing either EBIT or EBITDA, or positive taxable income for at least two out of the last five years unless the financing customer is an Affordable Multifamily Customer; and
   4. (4) The Eligible Commercial Financing Customer's debt service coverage ratio must be greater than 1.10 for at least two out of the last five years.
4. (d) In addition to the requirements listed in this section, if the financing customer is an Affordable Multifamily Customer the FPE must review the mortgage on the Multifamily Property to determine if the payments are in arrears.

Note: Authority cited: Sections 26006 and 26009, Public Resources Code. Reference: Sections 26002, 26002.5, 26003, 26006, 26011 and 26040, Public Resources Code.

History

1. New section filed 12-17-2018 as a deemed emergency pursuant to Public Resources Code section 26009; operative 12-17-2018 (Register 2018, No. 51). A Certificate of Compliance must be transmitted to OAL by 6-17-2019 or emergency language will be repealed by operation of law on the following day.

2. Change without regulatory effect amending section filed 4-4-2019 pursuant to section 100, title 1, California Code of Regulations (Register 2019, No. 14).

3. New section refiled 6-11-2019 as a deemed emergency pursuant to Public Resources Code section 26009, including amendment of Note; operative 6-18-2019 (Register 2019, No. 24). A Certificate of Compliance must be transmitted to OAL by 9-16-2019 or emergency language will be repealed by operation of law on the following day.

4. New section refiled 9-12-2019 as a deemed emergency pursuant to Public Resources Code section 26009; operative 9-16-2019 pursuant to Government Code section 11343.4(b)(2) (Register 2019, No. 37). A Certificate of Compliance must be transmitted to OAL by 12-16-2019 or emergency language will be repealed by operation of law on the following day.

5. Certificate of Compliance as to 9-12-2019 order transmitted to OAL 12-13-2019 and filed 1-21-2020 (Register 2020, No. 4).

6. Repealer and new section and amendment of Note filed 7-19-2021 as an emergency; operative 7-19-2021 (Register 2021, No. 30). A Certificate of Compliance must be transmitted to OAL by 1-18-2022 or emergency language will be repealed by operation of law on the following day.

7. Repealer and new section and amendment of Note refiled 12-30-2021 as a deemed emergency pursuant to Public Resources Code section 26009; operative 1-18-2022 (Register 2021, No. 53). A Certificate of Compliance must be transmitted to OAL by 4-18-2022 or emergency language will be repealed by operation of law on the following day.

8. Repealer and new section and amendment of Note refiled as a deemed emergency pursuant to Public Resources Code section 26009; operative 4-18-2022 (Register 2022, No. 15). A Certificate of Compliance must be transmitted to OAL by 7-18-2022 or emergency language shall be repealed by operation of law on the following day.

9. Certificate of Compliance as to 4-18-2022 order transmitted to OAL 7-12-2022 and filed 8-15-2022 (Register 2022, No. 33).

10. Amendment of subsection (c)(3) and new subsection (d) filed 5-13-2024 as a deemed emergency pursuant to Public Resources Code section 26009; operative 5-13-2024 (Register 2024, No. 20). A Certificate of Compliance must be transmitted to OAL by 11-12-2024 or emergency language will be repealed by operation of law on the following day.

11. Amendment of subsection (c)(3) and new subsection (d) refiled 11-4-2024 as a deemed emergency pursuant to Public Resources Code section 26009; operative 11-13-2024 pursuant to Government Code section 11346.1(d) (Register 2024, No. 45). A Certificate of Compliance must be transmitted to OAL by 2-11-2025 or emergency language will be repealed by operation of law on the following day.

12. Amendment of subsection (c)(3) and new subsection (d) refiled 2-5-2025 as an emergency; operative 2-11-2025 pursuant to Government Code section 11346.1(d) (Register 2025, No. 6). A Certificate of Compliance must be transmitted to OAL by 5-12-2025 or emergency language will be repealed by operation of law on the following day.

13. Certificate of Compliance as to 2-5-2025 order transmitted to OAL 2-5-2025 and filed 3-20-2025 (Register 2025, No. 12).