162-A:13-b Business Loan Enhancement Program. –
I. Upon recommendation of the authority for the proper implementation of the declared purposes of this chapter, the governor and council may award a state guarantee of the principal of, interest on, and reasonable collection expenses related to, loans which meet the requirements set forth in this section. The maximum amount for which the state may be liable pursuant to a guarantee awarded in accordance with this section shall not at any time exceed the lesser of $250,000 or 22.23 percent of the maximum principal amount that may be borrowed under the terms of the loan, plus in either case interest and related reasonable collection expenses with respect to such loan. The full faith and credit of the state shall be pledged for any such guarantee; provided that the guarantee shall not cause the contingent credit limit of RSA 162-A:22 to be exceeded.
II. The state's guarantee of a loan under this section shall be evidenced by a guarantee agreement entered into by the state, the lender, and the borrower. The guarantee agreement shall contain such terms and conditions as the authority and the governor and council may impose, including, without limitation, restrictions on the use of loan proceeds, restrictions on the use and operation of any project financed or assisted by the loan, appropriate controls on the requisition of loan proceeds by the borrower, provisions for the state to demand acceleration of the payment of the loan in the event of a default by the borrower, provisions for payment to the authority of guarantee fees and reimbursement of costs and expenses, provisions for reimbursement of the state if the state is required to honor the guarantee, appropriate financial covenants, and provisions for the establishment of reserves. Subject to this section and the terms and conditions of such guarantee agreement, the guarantee agreement may provide that the state shall be liable to pay the first dollar of loss realized by the bank with respect to the guaranteed loan. In addition, as a condition of awarding any guarantee, the state shall be subrogated to all of the rights and security of the lender to the extent it honors the guarantee. Any guarantee agreement authorized in accordance with this section shall be executed on behalf of the state by the chairperson, vice chairperson, or executive director of the authority. The governor, with the advice and consent of the council, is authorized to draw a warrant for such sum as may be necessary out of money in the state treasury not otherwise appropriated, for the purpose of honoring any guarantee awarded under this section.
III. Any loan guaranteed under this section shall meet the following requirements:
(a) The total principal amount of the loan shall not exceed 90 percent of the appraised fair market value of the collateral securing repayment of the loan, as determined pursuant to an appraisal of the collateral prepared by an independent party in connection with such loan and provided to the authority prior to awarding a guarantee.
(b) The final maturity date of the loan shall not be later than the later of 10 years from the date the loan was made or 10 years from the date the project was placed in service.
(c) After the project has been placed in service, the principal balance of the loan shall be scheduled to be reduced annually by an amount equal to not less than the principal amount that would be paid under a 20-year amortization schedule requiring fixed annual payments, to be applied to accrued interest first with any excess to principal, and a fixed interest rate not less than the interest rate in effect on the date the loan becomes effective, provided that in connection with any renewal of a loan such principal reduction shall not be required.
IV. The maximum amount for which the state may be liable pursuant to a guarantee awarded in accordance with this section shall be reduced by one dollar for every dollar of principal that is paid with respect to the loan that is subject to the guarantee.
V. The governor and council shall not award or renew any state guarantee under this section unless after a hearing they have made the findings specified in RSA 162-A:18.