New York Codes, Rules and Regulations
Title 21 - Miscellaneous
Chapter L - New York State Urban Development Corporation
Part 4242 - Jobs Now Program
Section 4242.6 - Business terms
Universal Citation: 21 NY Comp Codes Rules and Regs ยง 4242.6
Current through Register Vol. 45, No. 52, December 27, 2023
(a) Loans.
(1) Within the limitations established
hereunder, terms and security arrangements will be flexible, depending on the
type of loan and the particular characteristics of the project under
consideration.
(2) Interest rates
on loans will be set at the time the directors approve an application. Rates
and terms will be fixed based upon what is necessary to make the project
feasible, and will reflect market conditions, the applicant's ability to repay
and project requirements. The interest rate established for any loan generally
will not be lower than three percent.
(3) Loans generally will be made for the
following terms:
(i) Loans made for the
purpose of financing the acquisition of real property or the acquisition,
renovation or construction of facilities may be made for a term not to exceed
20 years. In a co-equal and coordinate mortgage situation, a mortgage granted
to the corporation will match the term of the other mortgagee. ESD will not
make construction loans except in its sole discretion in extremely limited
circumstances.
(ii) Loans made for
the purpose of financing the acquisition of machinery and equipment may be made
for a term of up to seven years, or the useful life of the collateral,
whichever is less.
(iii) Working
capital loans will be made for a term of from up to four years.
(4) Standard repayment terms
generally will include level debt service payments over the term of the loan.
In certain circumstances, deferred or graduated payments may be permitted,
provided that the loan is fully amortized over the remainder of the loan
term.
(5) Guarantees generally will
be required of any holder of 20 percent or more of the shares of the borrower
in those instances in which the corporation determines that the financial
circumstances of the borrower alone are insufficient reasonably to assure
repayment of the program loan and such guarantee is necessary or advisable to
secure repayment.
(b) Loans, loan guarantees, and grants, including interest subsidy grants.
(1) Written commitments, which may be
conditioned upon receipt of program assistance, are required before an
application can be approved for funding.
(2) Before or simultaneously with
disbursement of an interest subsidy grant, the loan being subsidized must be
funded.
(3) A 10 percent equity
contribution generally will be required.
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