§189-25 - Loans, terms, and restrictions.
§189-25 Loans, terms, and restrictions. The department may make loans to individuals or businesses for the financing of the purchase, construction, renovation, maintenance, or repair of vessels. The loans may be made in conjunction with loans made by other financial institutions including the Financial Assistance Division of the National Marine Fisheries Service and the SBA. Where the loans made by the department are secured, such security may be subordinated to the loans made by other financial institutions, when subordination is required in order to obtain loans from the institutions. The necessity for and the extent of security required in any loan shall be determined by the director.
The foregoing powers shall be subject, however, to the following restrictions and limitations:
(1) No loan of state funds shall exceed eighty per cent of the cost of purchase, construction, renovation, maintenance, or repair of a vessel.
(2) No loan for renovation, maintenance, or repair of a fishing vessel shall exceed $50,000 nor for a term exceeding ten years.
(3) No loan for purchase or construction of a fishing vessel shall be made for a term exceeding twenty years.
(4) Each loan shall bear simple interest at the rate of seven and one-half per cent a year.
(5) The commencement date for the repayment of the first installment on the principal of each loan may be deferred by the director, but in no event shall such initial payment be deferred in excess of two years.
(6) In the event the State repossesses any vessel financed under this program, the repossessed vessel shall not be resold to the individual to whom the loan has been made, or to anyone with a financial interest in the vessel. [L 1965, c 193, §6; Supp, §21-105; HRS §189-25; am L 1968, c 28, §3; am L 1975, c 167, pt of §4; am L 1976, c 70, pt of §1]
Note
"Financial Assistance Division", National Marine Fisheries Service, now known as "Financial Services Division".