Rule 413-6-1-.07. Eligible Activities

An eligible lender shall use the ESBD Loan Guarantee Program to partially guarantee a new loan made to an eligible sub-recipient business who then must use the lender's funds for sound business purposes which may include, but not be limited to the following:

1. A. acquisition of land (by purchase or lease);
2. B. improvement of a site (e.g., grading, streets, parking lots, landscaping);
3. C. acquisition of one or more existing buildings;
4. D. conversion, expansion or renovation of one or more existing buildings;
5. E. construction of one or more new buildings; acquisition (by purchase or lease);

6. F. installation of fixed assets and working capital.

   1. (2) A working capital loan must be adequately secured by accounts receivable or inventory of the sub-recipient business properly margined according to the lender's normal collateral guidelines. Working capital can also be secured by tangible assets owned by the principals of the business.
   2. (3) An ESBD guaranteed loan cannot exceed 90% of the value of the underlying collateral. Proper collateral documents must be executed and recorded as necessary including security agreements, deeds to secure debt, and UCC financing statements.
   3. (4) Tangible assets financed with an ESBD guaranteed loan must be supported with proper cost documentation including equipment invoices or a real estate settlement statement.

Authority: O.C.G.A. Sec. 50-34-1et seq.

History. Original grant description entitled "Eligible Activities" submitted June 27, 2005.