1. A. Any applicant/borrower(s) applying for either a loan or a line of credit will be required first to contact a CSP financial lending entity that is willing to entertain, originate, process and service such a loan or line of credit with the prospect of an LEDC cash collateral deposit, and the lender will then contact LEDC for qualification and shall submit a complete application to LEDC for its review, approval and acceptance. The financial lender shall also submit to LEDC the lender’s assurances, certifications, representations and warranties, and shall be responsible for obtaining and submitting to LEDC assurances of eligibility, including certifications, representations and warranties from each borrower, all as required by the American Rescue Plan Act of 2021 and the SSBCI.
2. B. Information submitted to LEDC with the application representing the applicant/borrower’s business plan, financial position, financial projections, personal financial statements and background checks will be kept confidential to the extent allowed under the Louisiana Public Records Law, R.S. 44:1 et seq. Confidential information in the files of LEDC and its accounts acquired in the course of its duty will be used solely by and for LEDC.

3. C. The following CSP submission and review policies shall be followed.

   1. 1. The lender is expected to use its best efforts to provide small Louisiana businesses, SEDI, with the maximum practicable opportunity to participate in the CSP.

   2. 2. The borrower’s completed Louisiana Economic Development Corporation CSP loan packet must be submitted by the lender to LEDC to include:

      1. a. A borrowers completed CSP application and related information and materials.
      2. b. A small business concerns, including very small businesses.
      3. c. Businesses applying for consideration as a SEDI owned business will have to self-certify under conditions in Subparagraph a-c as noted above in §9103 under SEDI-owned business definition.
      4. d. The lender shall submit to LEDC its complete analysis and evaluation, proposed loan structure, and commitment letter to the borrower. LEDC staff may do its own review and evaluation of the application packet. The lender shall submit to LEDC the same pertinent data that it submitted to the lending institution's loan committee, whatever pertinent data the lending institution can legally supply.
      5. e. The lender’s and borrower’s signed assurances and certifications as required by the U.S. Treasury.
   3. 3. LEDC staff will review the application and analysis, and then approve and accept or disapprove and reject the application, if the dollar amount of the loan is within the staff’s board approved authority, or make recommendations to the board committees and to the board for approval and acceptance or disapproval and rejection.
   4. 4. The LEDC's board of directors, or the board’s designated committee, will review only the completed applications and related materials submitted by LEDC staff and may approve and accept or disapprove and reject applications for approval or acceptance or the designated board committee may simply make recommendations to the LEDC board for its decision.
   5. 5. The applicant/borrower(s) or their designated representative(s), and the loan officer or a representative of the lender shall be required to attend the LEDC’s board of directors meeting wherein the application will be considered by the board; but shall not be required to attend meetings of the LEDC Staff or the designated board committee, unless the LEDC requests their presence.
   6. 6. LEDC's board of directors, or the board’s designated committee that has considered the application has the final approval and acceptance or disapproval and rejection authority for such applications; except for those loans which shall be within the staff’s authority to approve or disapprove, as established by the LEDC board, the staff shall have the final approval and acceptance or disapproval and rejection authority, unless the board overrules the staff’s decision.
   7. 7. The lender will be notified by e-mail of the outcome of the application process.

   8. 8. Funds approved for each CSP application will have a reservation period of 90 calendar days from the approval date.

      1. a. If an approved CSP loan does not close within 90 calendar days from the final LEDC approval date, the reservation period will expire and funds will be released to the general program fund to be used for other CSP requests, unless an extension has been approved by LEDC board or its designated committee, or LEDC staff.
      2. b. Once a reservation period has expired, a lender will need to re-apply and start the application and review process over with a new or up-dated application.

4. D. The following CSP Loan Closing Policies shall be followed by the lender.

   1. 1. Lender shall notify LEDC of its loan closing and provide draft loan closing documents for review at least five business days prior to the closing date.

   2. 2. LEDC will open and pledge an interest bearing collateral deposit account (a certificate of deposit) with the lender in LEDC’s name, as follows:

      1. a. 100 percent of the approved cash collateral deposit to the Lender will be funded once the CSP agreement, deposit account agreement, signature cards, and any other applicable deposit account documents have been executed.
   3. 3. At the loan closing, lender will execute the LEDC collateral deposit agreement, and will return the signed original to LEDC with the loan documents.
   4. 4. Immediately following the loan closing the lender will furnish to LEDC copies of all fully executed loan documents.

5. E. Loan Purpose Requirements and Prohibitions. In addition to the application process provisions provided above, and in connection with each and any loan (including a line of credit loan) that the lender requests be approved and accepted by LEDC to be enrolled under this program, the lender shall also be responsible for obtaining and providing LEDC with the lender’s application assurances and certifications as well as application assurances and certifications from each applicant/borrower stating that the loan proceeds shall not be used for any impermissible purpose under the SSBCI program, and the loan proceeds shall be used for an eligible business purpose, as that term is defined in §9107. A hereinafter; and additionally:

   1. 1. The loan proceeds shall be used for a business purpose. A business purpose includes, but is not limited to, start-up costs, working capital, business procurement, franchise fees, equipment, inventory, as well as the purchase, construction, renovation or tenant improvements of an eligible place of business that is not for passive real estate investment purposes. The definition of business purpose excludes activities that relate to acquiring or holding passive investments such as commercial real estate ownership, the purchase of securities; and lobbying activities as defined in section 3(7) of the Lobbying Disclosure Act of 1995, P.L. 104-65, as amended.

   2. 2. The loan proceeds will not be used to:

      1. a. repay any delinquent federal or state income taxes unless the borrower has a payment plan in place with the relevant taxing authority; or
      2. b. repay taxes held in trust or escrow, e.g. payroll or sales taxes; or
      3. c. reimburse funds owed to any owner, including any equity injection or injection of capital for the business’ continuance; or
      4. d. to purchase any portion of the ownership interest of any owner of the business.

   3. 3. The borrower is not:

      1. a. an executive officer, director, or principal shareholder of the financial institution lender; or
      2. b. a member of the immediate family of an executive officer, director, or principal shareholder of the financial institution lender; or
      3. c. a related interest of any such executive officer, director, principal shareholder, or member of the immediate family.

   4. 4. The borrower is not:

      1. a. a business engaged in speculative activities that develop profits from fluctuations in price rather than through normal course of trade, such as wildcatting for oil, investments in stock market, and dealing in commodities futures, unless those activities are incidental to the regular activities of the business and part of a legitimate risk management strategy to guard against price fluctuations related to the regular activities of the business; or
      2. b. a business that earns more than half of its annual net revenue from lending activities; unless the business is a non-bank or non-bank holding company certified as a community development financial institution; or
      3. c. a business engaged in pyramid sales, where a participant's primary incentive is based on the sales made by an ever-increasing number of participants; or
      4. d. a business engaged in activities that are prohibited by federal law or applicable law in the jurisdiction where the business is located or conducted. (Included in these activities is the production, servicing, or distribution of otherwise legal products that are to be used in connection with an illegal activity, such as selling drug paraphernalia or operating a motel that knowingly permits illegal prostitution); this category of business includes direct and indirect marijuana businesses, as defined in SBA Standard Operating Procedures 50 10 6; or
      5. e. a business engaged in gambling enterprises, unless the business earns less than 33 percent of its annual net revenue from lottery sales.
   5. 5. No principal of the borrowing entity has been convicted of a sex offense against a minor (as such terms are defined in §111 of the Sex Offender Registration and Notification Act (42 U.S.C. 16911)). For the purposes of this certification, principal is defined as if a sole proprietorship, the proprietor; if a partnership, each managing partner and each partner who is a natural person and holds a 20 percent or more ownership interest in the partnership; and if a corporation, limited liability company, association or a development company, each director, each of the five most highly compensated executives or officers of the entity, and each natural person who is a direct or indirect holder of 20 percent or more of the ownership stock or stock equivalent of the entity.”
   6. 6. The corporation shall not knowingly approve any CSP request if the applicant/borrower has presently pending, at the federal, state, or local level, any proceeding concerning denial or revocation of a necessary license or permit or any legal proceeding involving a criminal violation other than misdemeanor traffic violations. Nor should they approve any CSP request if the applicant/borrower or his/her/its principle management has a criminal record showing convictions for any criminal violations other than misdemeanor traffic violations in which the applicant/borrower or his/hers/its principle management has not been reinstated into society.

6. F. The financial institution lender must also provide to LEDC with the application, in connection with each loan to be enrolled under this Chapter 91 Program, and assurances affirming:

   1. 1. the loan has not been made in order to place under the protection of the approved state Capital Access Program (CAP) prior debt that is not covered under the approved state CAP and that is or was owed by the borrower to the financial institution lender or to an affiliate of the financial institution lender;
   2. 2. the loan is not a refinancing of a loan previously made to that borrower by the financial institution lender or an affiliate of the financial institution lender;
   3. 3. no principal of the financial institution lender has been convicted of a sex offense against a minor (as such terms are defined in §111 of the Sex Offender Registration and Notification Act (42 U.S.C. 16911)). For the purposes of this certification, principal is defined as if a sole proprietorship, the proprietor; if a partnership, each partner; if a corporation, limited liability company, association or a development company, each director, each of the five most highly compensated executives, officers, or employees of the entity, and each direct or indirect holder of 20 percent or more of the ownership stock or stock equivalent of the entity.
   4. 4. The borrower business structure either is a sole proprietor qualified to do and doing business in Louisiana, or is a for-profit corporation, partnership, limited liability company, limited liability partnership, joint venture, cooperative, non-profit entity with an eligible business purpose as defined above or other entity which is registered and authorized to conduct business in the state of Louisiana.

NOTE: For the purposes of these three borrower restrictions, the terms executive officer, director, principal shareholder, immediate family, and related interest refer to the same relationship to a financial institution lender as the relationship described in part 215 of title 12 of the Code of Federal Regulations, or any successor to such part.

NOTE: Permissible borrowers include state-designated charitable, religious, or other non-profit or eleemosynary institutions, government-owned corporations, consumer and marketing cooperatives, and faith-based organizations provided the loan is for a business purpose as defined above.

Authority Note

AUTHORITY NOTE: Promulgated in accordance with R.S. 36:104, 36:108 and 51:2312

Historical Note

HISTORICAL NOTE: Promulgated by the Department of Economic Development, Office of Business Development and the Louisiana Economic Development Corporation, LR 48:1462 (June 2022), LR 48:1908 (July 2022), amended by Louisiana Economic Development, Office of Economic Development and the Louisiana Economic Development Corporation, LR 52:730 (May 2026).