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Loans will be inade to high tech businesses particularly for the <br />commercialization of new products developed by university researchers. <br />3. Allowable Lending Activities <br />Loans will be made for the purchase of real estate, the construction of real <br />estate, the rehabilitation of real estate, the purchase of equipment, or working <br />capital. <br />4. Prohibited Lending Activities <br />Per 13 CFR 307.17 b, IRF capital shall not be used to: (1) acquire an equity <br />position in private business; (2) subsidize interest payments on an existing IRF <br />loan; (3) provide for borrowers' required equity contributions under other <br />Federal Agencies' loan programs; (4) enable borrowers to acquire an interest in <br />a business either through the purchase of stock or through the acquisition of <br />assets, unless sufficient justification is provided in the loan documentation. <br />Sufficient justification may include acquiring a business to save it from <br />imminent closure or to acquire a business to facilitate a significant expansion <br />or increase investment with a significant increase in jobs. The potential <br />economic benefits must be clearly consistent with the strategic objectives of the <br />IRF; (5) provide IRF loans to a borrower for the purpose of investing in interest - <br />bearing accounts, ceitificates of deposit, or any investment unrelated to the IR.F; <br />(6) refinance existing debt unless (i) the IRF Recipient sufficiently <br />demonstrates in the loan documentation a "sound economic justification" for <br />the refinancing (e.g. the refinancing will support additional capital investment <br />intended to increase business activities). For this purpose, reducing the risk of <br />loss to an existing tender or lowering the cost of financing to a borrower shall <br />not, without other indicia constitute a sound economic justification: or (ii) IRT, <br />capital will finance the purchase of rights of a prior lienholder during a <br />foreclosure action which is necessary to preclude a significant loss on an IRF <br />loan. IRF capital may be used for this purpose only if there is a high probability <br />of receiving compensation from the sale of assets sufficient to cover the IRF's <br />costs plus a reasonable portion of the outstanding IR-F loan within 18 months <br />following the date of refinancing. <br />Loan agreements with IRF borrowers will include a provision for calling the <br />loan if it is determined that the business violated Federal non -relocation <br />provisions. <br />5. Loan Size <br />The minimum loan size will be $25,000. The maximum loan size will not be <br />greater than 25% of the IRF's total capital base. The maximum amount which <br />can be outstanding to any one borrower is 25% of the IRFs total capital base, <br />13 <br />