The funding agreement for a loan must contain specific requirements to secure the loan. A loan may be secured by one or more of the following:

1. (1) Full faith and credit of the borrower;
2. (2) Pledges of taxes or assessments;
3. (3) Pledges of facility revenue;
4. (4) Liens on the interest of the applicant in all real and personal property, easements, rights-of-way, water rights, purchase contracts, and similar property rights, including leasehold interests, used in connection with the project, whether owned at the time the loan is approved or acquired with loan funds; or

5. (5) Guarantees.

   For loans secured by project revenues, a debt coverage ratio, which is a comparative statistic showing the relationship between the applicant's debt and the security pledged toward repayment, of at least 100 percent must be demonstrated in all funding agreements.

Source: 23 SDR 12, effective July 30, 1996; 28 SDR 95, effective December 19, 2001; 40 SDR 14, effective July 29, 2013.

General Authority: SDCL 46A-1-84.

Law Implemented: SDCL 46A-1-61 , 46A-1-83.