1. The department shall, with the advice of the loan and credit guarantee advisory board, establish and administer a loan and credit guarantee program. The department, pursuant to agreements with financial institutions, shall provide loan and credit guarantees, or other forms of credit guarantees for qualified businesses and targeted industry businesses for eligible project costs. A loan or credit guarantee provided under the program may stand alone or may be used in conjunction with or to enhance other loans or credit guarantees offered by private, state, or federal entities. The department may purchase insurance to cover defaulted loans meeting the requirements of the program. However, the department shall not in any manner directly or indirectly pledge the credit of the state. Eligible project costs include expenditures for productive equipment and machinery, working capital for operations and export transactions, research and development, marketing, and such other costs as the department may so designate.
2. A loan or credit guarantee or other form of credit guarantee provided under the program to a participating financial institution for a single qualified business or targeted industry business shall not exceed one million dollars in value. Loan or credit guarantees or other forms of credit guarantees provided under the program to more than one participating financial institution for a single qualified business or targeted industry business shall not exceed ten million dollars in value.
3. In administering the program, the department shall consult and cooperate with financial institutions in this state and with the loan and credit guarantee advisory board. Administrative procedures and application procedures, as practicable, shall be responsive to the needs of qualified businesses, targeted industry businesses, and financial institutions, and shall be consistent with prudent investment and lending practices and criteria.
4. Each participating financial institution shall identify and underwrite potential lending opportunities with qualified businesses and targeted industry businesses. Upon a determination by a participating financial institution that a qualified business or targeted industry business meets the underwriting standards of the financial institution, subject to the approval of a loan or credit guarantee, the financial institution shall submit the underwriting information and a loan or credit guarantee application to the department.
5. The department, with the advice of the loan and credit guarantee advisory board, shall adopt a loan or credit guarantee application procedure for a financial institution on behalf of a qualified business or targeted industry business.
6. Upon approval of a loan or credit guarantee, the department shall enter into a loan or credit guarantee agreement with the participating financial institution. The agreement shall specify all of the following:
a. The fee to be charged to the financial institution.
b. The evidence of debt assurance of, and security for, the loan or credit guarantee.
c. A loan or credit guarantee that does not exceed fifteen years.
d. Any other terms and conditions considered necessary or desirable by the department.
7. The department, with the advice of the loan and credit guarantee advisory board, may adopt loan and credit guarantee application procedures that allow a qualified business or targeted industry business to apply directly to the department for a preliminary guarantee commitment. A preliminary guarantee commitment may be issued by the department subject to the qualified business or targeted industry business securing a commitment for financing from a financial institution. The application procedures shall specify the process by which a financial institution may obtain a final loan and credit guarantee.
2003 Acts, 1st Ex, ch 1, §104, 133
For future repeal of this section effective June 30, 2010, see 2003 Acts, 1st Ex, ch 1, §114
Previous Section 15E.223
Next Section 15E.225
© 2004 Cornell College and League of Women Voters of Iowa
Comments about this site or page?
webmaster@legis.iowa.gov.
Please remember that the person listed above does not vote on bills. Direct all comments concerning legislation to State Legislators.
Last update: Thu Jan 15 10:49:41 CST 2004
URL: /DOCS/IACODE/2003SUPPLEMENT/15E/224.html
jhf