Oregon Administrative Rules
Chapter 123 - OREGON BUSINESS DEVELOPMENT DEPARTMENT
Division 92 - SMALL BUSINESS EXPANSION LOAN FUND (OREGON ROYALTY FUND)
Section 123-092-0070 - Loan Agreement for an Oregon Royalty Loan
Universal Citation: OR Admin Rules 123-092-0070
Current through Register Vol. 63, No. 9, September 1, 2024
(1) If the Finance Committee approves a loan, the Department and the borrower may enter into a loan contract that, among other matters:
(a) shall set forth a plan for
repayment by the borrower to the Oregon Royalty Fund moneys borrowed through
the Oregon Royalty Loan Program, along with royalties calculated as a
percentage of the borrower's sales or revenue as a means of effecting an
adequate rate of return typically up to 2X on the monies loaned, as determined
at the sole discretion of the Finance Committee, and:
(A) based on loan pricing and total repayment
costs, ORL financing for the project does not directly compete with traditional
commercial lending sources,
(B) is
commensurate with the level of risk taken when making the loan and are
anticipated to cover operational expenses and losses incurred by the
ORF.
(b) Shall set forth
a schedule of or conditions triggering payments and the period of the loan,
which shall not exceed 61 months from the date of the loan contract.
(c) Shall provide that the liability of the
State under the contract is contingent upon the availability of moneys in the
Oregon Royalty Fund for use in the business development project.
(d) Shall require that the borrower is
responsible for payment of, separate and above any other amounts owed on the
loan:
(A) Insurance premiums as needed to
maintain in full force life insurance and other types of insurance in an amount
and coverage that is acceptable to the Finance Committee.
(B) Out-of-pocket costs associated with the
loan closing which may include but are not limited to filing fees, recording
fees, title insurance, appraisals, and attorney fees.
(e) That the borrower will provide to the
Department on a periodic basis, such financial statements as the Department may
require.
(f) Shall provide that the
applicant, borrower, guarantors, and principal owners are in compliance with
and agrees to abide by all federal, state, and local laws and
regulations.
(g) Shall specify any
additional payment from the borrower as the Finance Committee may require for
other circumstances, such as if the borrower elects to repay the loan before
the originally approved term, if the borrower is acquired or experiences a
significant change in ownership, or to achieve a specified repayment amount or
rate of return.
(h) At a Liquidity
Event, the full repayment amount as agreed upon will be due in full.
(2) The Department, at its sole discretion, may require the execution of a Commitment Letter and receipt of a non-refundable Commitment Fee to secure resources necessary to fund the loan. The Commitment Fee will be applied at closing to the Loan Fee. If the loan does not close, the Commitment Fee will not be refunded.
Statutory/Other Authority: ORS 285B.092 & OL Ch 71 2018
Statutes/Other Implemented: ORS 285B.092 & OL Ch 71 2018
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