New York Codes, Rules and Regulations
Title 21 - Miscellaneous
Chapter L - New York State Urban Development Corporation
Part 4243 - Economic Development Fund
General
Section 4243.4 - General terms and conditions
Universal Citation: 21 NY Comp Codes Rules and Regs ยง 4243.4
Current through Register Vol. 46, No. 12, March 20, 2024
Program assistance shall not be provided to ineligible recipients. Program assistance shall generally be offered on the applicable terms and conditions set forth below, in the other provisions of this Part and as more specifically set forth in the sections of this Part for each type of program assistance.
(a) Loans and loan guarantees. With respect to program loans and loan guarantees:
(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. Loans that provide permanent financing and are secured by a
letter of credit or fixed assets will be preferred.
(2) Interest rates on loans will be set at
the time the corporation's directors approve an application. Rates and terms
will be determined based upon what is necessary to make the project feasible,
and will reflect market conditions, the borrower' s ability to repay and
project requirements. The interest rate established for any loan generally will
not be lower than three percent.
(3) Loans and loan guarantees generally will
be made under the following terms:
(i) Loans
made or guaranteed 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, provided that loan guarantees for such
purposes shall generally be for no more than 60 percent of the loan being
guaranteed or $2,000,000, whichever is less. In a co-equal and coordinate
mortgage situation, a mortgage granted to the corporation will match the term
of the other mortgage.
(ii) Loans
made or guaranteed 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, provided that loan guarantees for such
purpose shall generally be for no more than 60 percent of the loan being
guaranteed or $2,000,000, whichever is less.
(iii) Working capital loans made or
guaranteed may be for a term of up to four years to finance capital-related
expenses, including, without limiting the foregoing, accounts receivable and
inventory, provided that working capital loan guarantees shall generally be for
no more than 60 percent of the loan being guaranteed or $2,000,000, whichever
is less.
(iv) Except as otherwise
set forth in this Part, loans shall generally not exceed 40 percent of the
total project costs.
(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)
Generally, the corporation shall require guarantees of a program loan or loan
guarantee from shareholders that own 20 percent or more of the shares of the
borrower and in other situations deemed appropriate by the corporation to
adequately secure a loan and loan guarantee obligations.
(b) Loans, loan guarantees, and grants, including interest subsidy grants. For all program loans, loan guarantees, and grants, including, without limiting the foregoing, interest subsidy grants:
(1) Commitments shall be in writing only and
shall be conditioned upon receipt by the corporation of program monies to fund
such commitment.
(2) Before or
simultaneously with the disbursement of an interest subsidy grant, the loan
being subsidized must be funded and the appropriate documentation evidencing
the same must be submitted.
(3)
Interest subsidy grants will generally be made directly to a lending
institution and shall generally be for five years. The corporation may, in its
sole discretion, elect to make interest subsidy grant payments directly to a
grantee.
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