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§ 8078.31. Loan Enrollment.

4 CA ADC § 8078.31Barclays Official California Code of RegulationsEffective: March 25, 2024

Barclays California Code of Regulations
Title 4. Business Regulations
Division 11. California Pollution Control Financing Authority (Refs & Annos)
Article 7. Capital Access Program for Small Businesses
Effective: March 25, 2024
4 CCR § 8078.31
§ 8078.31. Loan Enrollment.
In addition to the terms and conditions set forth in Section 8072, the following additional provisions shall apply to the Collateral Support Program:
(a) Participating Financial Institutions must submit to the Authority a Collateral Support Program Request and receive an Initial Approval prior to the funding of the loan. The Collateral Support Program Request shall include all of the information required in Section 8072, in addition to the following:
(1) The type of the Qualified Loan, including whether the Qualified Loan is:
(A) A term loan, a bridge loan, or a line of credit
(2) The term of support, which shall be up to a maximum of 60 months.
(3) The requested amount of Collateral Support, subject to the limits in this Section.
(4) The anticipated date of loan disbursement.
(5) Risk Assessment of the Borrower that shall include the following:
(A) Collateral Support Contribution, based on the Participating Financial Institution's usual credit policy;
(B) Any appraisals applicable to the use of the proceeds or collateral;
(C) An evaluation demonstrating the need for the Collateral Support, including an evaluation demonstrating a strong credit profile of the borrower and the loan except for the lack of collateral;
(D) Description of all other available collateral, including that of any co-guarantors; and
(E) Confirmation that all such other available collateral shall be pledged and liquidated first in the event of a default, work-out or charge-off; and the order in which it shall be liquidated prior to making a claim against the Collateral Support.
(b) The Authority shall, upon receipt of a Collateral Support Program Request from the Participating Financial Institution, provide an Initial Approval if the Executive Director determines that the Qualified Loan meets the requirements of the Collateral Support Program.
(1) The Authority shall review each Collateral Support Program Request for completeness, for consistency with the terms and conditions for a Qualified Business and a Qualified Loan, and to determine whether the Authority shall offer and underwrite the Collateral Support.
(2) The Executive Director shall notify the Participating Financial Institution of the Executive Director's determination within 15 business days after receipt by the Authority of all documentation required to make such determination. The Executive Director's determination shall be final.
(3) At the time of Initial Approval, the Executive Director shall also be authorized to require reasonable conditions, contingencies, or additional parameters necessary to support a prudent underwriting of the Collateral Support by the Authority, including but not limited to additional requirements to ensure the eligibility of the Borrower and the loan, the availability of cash flow, the value of the available collateral, and the liquidation plan in the event of a default.
(4) The Initial Approval will include confirmation of the following:
(A) The total anticipated amount of the Qualified Loan.
(B) The term of enrollment of the Qualified Loan.
(C) The total amount of the Collateral Support, including Severely Affected Community or Socially and Economically Disadvantaged Individual incentives if applicable.
(D) The applicable Closing Fee.
(E) Any conditions, contingencies, or additional parameters deemed reasonable by the Executive Director.
(5) Upon the Initial Approval of the Collateral Support Program Request, the Authority will issue notice of such approval with instructions for the Participating Financial Institution to open a Loss Reserve Account pursuant to Section 8078.32 and deposit the Borrower's Closing Fee prior to the disbursement of the loan.
(6) The Initial Approval of the Collateral Support Program Request is valid for ninety (90) days.
(c) Within fifteen (15) business days of the closing of a Qualified Loan that has received with Initial Approval, the Participating Financial Institution shall complete and submit to the Authority the following for Final Enrollment:
(1) Changes, if any, to the total amount of the Qualified Loan.
(2) Changes, if any, to the term of enrollment of the Qualified Loan.
(3) Revisions, if any, to the Risk Assessment of the Borrower.
(4) Documentation responsive to any conditions, contingencies, or additional parameters placed on the Collateral Support Program Request.
(5) All certifications and representations required by the Participating Financial Institution and Borrower.
(6) Proof of Closing Fee deposit and Loss Reserve Account opening.
(7) The date of the disbursement of loan proceeds to the Borrower. The date of the disbursement must be after the date of the Initial Approval, and prior to the Final Enrollment.
(d) Collateral Support shall be determined based on the amount of loan and term of loan enrollment as follows:
(1) Small Business Loans are eligible to receive up to 40% of the loan value.
(2) All loans are eligible for a five (5) year term of support.
(3) All loans are eligible for an additional Severely Affected Community (SAC) Contribution if the Qualifying Business is located in a Severely Affected Community, or if the Qualified Business is considered to be Socially and Economically Disadvantaged in an amount of 10% of the loan value, not to exceed 25% of the Collateral Support.
(e) Closing Fees shall be calculated based on the amount of Collateral Support (exclusive of the additional Severely Affected Community (SAC) Contribution) or Socially and Economically Disadvantaged (SEDI) Contribution) determined by the term of Collateral Support as follows:
(1) For all loans there shall be a minimum Closing Fee of 0.50% of the Collateral Support, or $1000, whichever is greater.
(2) All loans will be subject to Closing Fees based on the Term of Support as follows:
(A) If Term of Support is less than or equal to 12 months, the fee will be 0.5% of the Collateral Support.
(B) If Term of Support is greater than 12 months, but does not exceed 24 months, the fee will be 0.75% of the Collateral Support, unless the loan is for a Bridge Loan, in which case the fee will be 0.50% of the Collateral Support.
(C) If Term of Support is greater than 24 months, but does not exceed 36 months, the fee will be 2.00% of the Collateral Support.
(D) If Term of Support is greater than 36 months, but does not exceed 48 months, the fee will be 2.75% of the Collateral Support.
(E) If the Term of Support is greater than 48 months, but does not exceed 60 months, the fee will be 3.00% of the Collateral Support.
(3) For lines of credit, the fee will be calculated based on the Collateral Support amount as provided in subdivision (e)(2). Prior to the expiration of the original Term of Enrollment, the Participating Financial Institution may request an extension, contingent upon current underwriting and subject to a 1.0% fee per year for each annual renewal up to a maximum of 60 months.
(4) For Bridge Loans, prior to the expiration of the original Term of Enrollment, the Participating Financial Institution may request an extension in writing. There is no fee associated with an approved extension as long as the total Term of Support as extended does not exceed 24 months. If the effect of any extension or series of extensions would increase the total Term of Support for the Bridge Loan into a tier associated with a higher Closing Fee, then any difference between the fees paid at closing and the newly calculated fees associated with the amended Term of Support would be charged to the Participating Financial Institution upon approval of the extension.

Credits

Note: Authority cited: Sections 44520 and 44559.5, Health and Safety Code. Reference: Sections 44559.2, 44559.4 and 44559.12, Health and Safety Code; and Section 1798.17, Civil Code.
History
1. New section filed 8-7-2017 as an emergency; operative 8-7-2017 pursuant to Health and Safety Code section 44520(b) (Register 2017, No. 32). A Certificate of Compliance must be transmitted to OAL by 2-5-2018 or emergency language will be repealed by operation of law on the following day, pursuant to Health and Safety Code section 44520(b).
2. Certificate of Compliance as to 8-7-2017 order, including amendment of subsections (a)(1)(C), (a)(1)(E), (b)(1), (b)(3) and (c)(7), transmitted to OAL 1-31-2018 and filed 3-15-2018; amendments operative 3-15-2018 pursuant to Government Code section 11343.4(b)(3) (Register 2018, No. 11).
3. Amendment of subsections (a), (a)(5)(E), (b)(4)(C), (b)(4)(E), (c)(4) and (d)(2)(B), new subsection (d)(3), subsection relettering and amendment of subsection (e)(1) filed 7-31-2020 as an emergency; operative 7-31-2020 (Register 2020, No. 31). Emergency expiration extended 60 calendar days (Executive Order N-40-20) plus an additional 60 days (Executive Order N-66-20). A Certificate of Compliance must be transmitted to OAL by 5-28-2021 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 7-31-2020 order, including amendment of subsection (a) and Note, transmitted to OAL 11-24-2020 and filed 1-11-2021; amendments operative 1-11-2021 pursuant to Government Code section 11343.4(b)(3) (Register 2021, No. 3).
5. Amendment filed 10-2-2023 as an emergency; operative 10-2-2023 (Register 2023, No. 40). A Certificate of Compliance must be transmitted to OAL by 4-1-2024 or emergency language will be repealed by operation of law on the following day.
6. Certificate of Compliance as to 10-2-2023 order transmitted to OAL 2-13-2024 and filed 3-25-2024 (Register 2024, No. 13).
This database is current through 6/28/24 Register 2024, No. 26.
Cal. Admin. Code tit. 4, § 8078.31, 4 CA ADC § 8078.31
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