Section 44.88.535. Conditions of loan guarantee.

   (a) The authority may guarantee a loan under AS 44.88.500 - 44.88.599 if the
        (1) loan
             (A) is commercially reasonable;
             (B) contains payment provisions satisfactory to the authority;
             (C) is secured by adequate collateral; however, the authority may waive on a case-by-case basis the requirement of collateral for a loan guarantee of $100,000 or less for which the proposed loan term does not exceed five years, but the ability to waive the requirement of this subparagraph or the grant of a waiver does not prevent the financial institution that holds the loan guaranteed by the authority from requiring reasonable collateral for the loan;
        (2) borrower demonstrates the ability to repay the loan from either or both of the following:
             (A) net cash flow from the borrower; and
             (B) proceeds from the sale of current assets that are collateral for the loan if the sale, or receipt of proceeds from the sale, is an event that creates a payment obligation; in this subparagraph, "current asset" means property that will be or could be converted into cash in the normal operation of a business within one year;
        (3) term of the loan does not exceed 20 years;
        (4) loan is originated with and serviced by a state chartered or federally chartered financial institution;
        (5) portion of the loan not guaranteed by the authority is held by the originating financial institution or another institution approved by the authority;
        (6) loan is made to a business with a majority interest held by state residents; and
        (7) loan guarantee provides a benefit to the borrower.
   (b) The authority may provide a guarantee of up to 80 percent of a loan that qualifies under AS 44.88.500 - 44.88.599. The ratio of the guarantee to the outstanding principal of the loan may not increase over the term of the loan.
   (c) The authority may guarantee the payment of interest on the guaranteed portion of a loan
        (1) in the manner established by the authority by regulation; and
        (2) for a period of time not to exceed
             (A) 90 days for loans or parts of loans not made to support an export transaction;
             (B) 180 days for loans or parts of loans made for a post-shipment loan guarantee to support an export transaction; in this subparagraph, "post-shipment loan guarantee" means a guarantee, or portion of a guarantee, that becomes effective after the export contract date that shipment of the related goods or raw materials or provision of the related services begins; or
             (C) 270 days for loans or parts of loans made for a pre-shipment loan guarantee to support an export transaction; in this subparagraph, "pre-shipment loan guarantee" means a guarantee, or part of a guarantee, that becomes effective before the export contract date that shipment of the related goods or raw materials or provision of the related services begins.

Authorities

44.88.530;44.88.535

Notes

Implemented As

3 AAC 99.730
3 AAC 99.760

References

3 AAC 99.730
AS 44.88.530
AS 44.88.530 Applicability of AS 44.88.535 - 44.88.560.

History

(Sec. 2 ch 162 SLA 1988; am Sec. 17 ch 123 SLA 1990; am Sec. 2, 3 ch 25 SLA 1991; am Sec. 11 ch 51 SLA 1992; am Sec. 11 ch 111 SLA 1996; am Sec. 14, 15 ch 109 SLA 1998)