Mississippi Administrative Code
Title 6 - Economic Development
Part 9 - Economic Development Division
Chapter 5 - Mississippi Community Development Financial Institution (CDFI) Small Business Loan Fund Program
Rule 6-9-5.8 - Loan Forgiveness or Loan Repayment

Participants may apply to the MDA to have the SBLF loan forgiven. The MDA will consider such applications for forgiveness if at a minimum, the following conditions are met:

* The participant has achieved at least two to one overall leverage within the 9-year term as calculated through the combined fund level, reinvestment level, or transaction level; and

* At least 95% of leveraged activity is to SEDI businesses.

The MDA is able to call any SBLF loans to a Participant should the MDA determine that said Participant is not meeting the programmatic requirements outlined. If the MDA calls the loan, the Participant must return an amount of money equal to the principal of the SBLF loan. The MDA will not forgive any of the principal on deployed funding.

Considerations for calling the SBLF loan are primarily compliance with eligibility and reporting requirements as outlined in these guidelines as well as deployment requirements. A participant must meet the following benchmarks:

* Deployment of at least 50% of SSBCI funds within 18 months of receipt of the loan from the MDA. If not met, the MDA may call the loan.

* Deployment of at least 100% of SSBCI funds within 36 months of receipt of the loan from the MDA. If not met, the MDA may call the loan.

These two benchmarks will be evaluated on a tranche-by-tranche basis. If a participating CDFI is not in compliance with deployment benchmarks at the time a new tranche of funding is to be allocated/disbursed by MDA, they are ineligible to receive funding in that tranche.

If a Participant issues SBLF-enabled loans that result in a loss of capital, the loss must at least be pari passu with the SBLF funds. In the event that the MDA calls the overall SBLF loan, the Participant will be required to fully repay the SBLF loan unless overall benchmarks are met for principal forgiveness as indicated elsewhere in these guidelines. Additionally, the MDA does reserve the right to factor loan fund performance in future tranche awards, such that Participants that issue underperforming loans may receive smaller SBLF loans in future tranche awards.

Miss. Code Ann. § 57-10-601; 12 USC § 5701 et seq.