(1) Department loans may not exceed $250,000 or the cost of the project, whichever is less. Payment terms and security arrangements will be flexible, depending on the particular characteristics of the project. Loans that are secured by fixed assets will be preferred.

(2) The interest rate on a department loan will be set at the time the department approves the loan application and will reflect market conditions, the program recipient's ability to repay and project requirements.

(3) The term for a department loan shall be determined by the department in its sole discretion, but shall not exceed 10 years.

(4) Written commitments from other funding sources necessary for completion of the project will be required before disbursement of a department loan.

(1) The department shall review the terms of any proposed financing institution loan to a program recipient. To obtain program assistance, financing institution loans shall be amortized over the term of the loan; provided, however, that deferred or graduated payments may be permitted for good cause shown, in the sole discretion of the department. The department may refuse to grant program assistance if the proposed interest rate on a financing institution loan is determined by the department to be unreasonably high, after considering prevailing market conditions and the interest rates on other loans.

(2) The department's commitment of program assistance for loans made by a financing institution will be final and the loan shall be closed only after the applicant and the financing institution receive written notification from the department approving both the loan application and the terms of the financing institution's loan commitment, and stating the type and material terms of the program assistance which will be provided by the department.

(3) For loans in which the principal amount is paid to the program recipient by the financing institution in installments as the work progresses, program assistance shall not be made available by the department prior to the payment by the financing institution of the final installment.