1. (a) Permissible use of financial commitment. The Authority's financial commitment is to be used to finance the project identified on the qualified application.
2. (b) Minimum amount of loan guaranty. The Authority shall not provide financial assistance to an applicant where the guarantied amount of the loan is less than $30,000.
3. (c) Maximum amount of loan guaranty. The Authority shall not provide a loan guaranty to an applicant, including its affiliates, that at any one time exceeds $2 million except that by a two-thirds vote of the board the total aggregate loan guaranty may exceed $2 million but may not exceed $5 million. The assistance in the form of a loan guaranty shall not exceed 90% of the total loan. Furthermore, the Authority may make, guaranty, insure, coinsure, or reinsure a loan up to the limits described above for a single eligible business which already has an active loan if the action is approved by a two-thirds vote of the members present.
4. (d) Extent of participation. The Authority shall participate in each and every loan in an amount not to exceed 80% of the Loan Guaranty Amount, not to exceed the limits in subsection (c) of this section.
5. (e) Interest. The interest rate on the guaranteed loan (not including guaranty fees) shall be the rate charged by the lender and approved by the Authority.
6. (f) Maturity. The maturity of the loan guaranty approved by the Authority must not exceed the useful life of the collateral and may be negotiated between the Authority and the lender.
7. (g) Security. Loans must be secured by collateral of a type, amount, and value which, when considered with other criteria, affords reasonable assurance of repayment.
8. (h) Fees. The board has adopted the following fee schedule which will be used to calculate the loan guaranty fee payable by the applicant to the Authority within ten days of the initial funding of the loan. A nonrefundable application fee will be required with the qualified application. If the qualified application is approved, the application fee will be considered as part of the loan guaranty fee. Any and all legal fees incurred by the board in issuing a guaranty and participating in any loan will be an obligation of the applicant.
9. (i) Closing the loan guaranty. The lender, the applicant, and the commissioner of agriculture or his designee may attend the verification and signing of the closing documents as prepared by staff and the lender.

10. (j) Reporting requirements.

    1. (1) The lender shall report in writing to the Authority as follows:

       1. (A) notification if the loan is placed on a watch list;
       2. (B) quarterly monitoring reports indicating loan balance, repayment status, and any credit changes reported to lender as indicated on the prescribed form; and
       3. (C) notification in the event of any breaches or defaults in the terms, conditions, or covenants of the note, loan agreement, or other loan documents.
    2. (2) The applicant shall provide annual financial statements and cash flow statements to the lender. Such statements should be audited but, if not, they must be signed by the owner of the project. The lender shall submit these reports to the Authority. If necessary the Authority may request other reports or documentation reasonably necessary to an assessment of the applicant's compliance with the program.

Source Note:The provisions of this §28.10 adopted to be effective April 23, 1991, 16 TexReg 2051; amended to be effective March 10, 1992, 17 TexReg 1533; amended to be effective January 17, 1994, 19 TexReg 66; amended to be effective October 4, 1995, 20 TexReg 7596; amended to be effective July 1, 1996, 21 TexReg 5685; amended to be effective December 13, 1996, 21 TexReg 11783.