6-09.15 Beginning Entrepreneur Loan Guarantee Program
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<![CDATA[CHAPTER 6-09.15BEGINNING ENTREPRENEUR LOAN GUARANTEE PROGRAM6-09.15-01. Definitions. As used in this chapter, unless the context otherwise requires:1."Beginning entrepreneur" means a resident of this state who:a.Has graduated from high school or has received a general equivalency<br>certificate.b.Has had some training, by education or experience, in the type of<br>revenue-producing enterprise which that person wishes to begin.c.Has, including the net worth of that person's dependents and spouse, if any, a<br>net worth of less than two hundred thousand dollars.2."Lender" means any lending institution that is regulated or funded under the laws of<br>this state or the United States and which has provided financing to a beginning<br>entrepreneur for the establishment of a qualified revenue-producing enterprise.3."Loan guarantee" means an agreement that in the event of default by a beginning<br>entrepreneur under a note and mortgage or other loan or financing agreement, the<br>Bank of North Dakota shall pay the lender the amount agreed upon up to eighty-five<br>percent of the amount of principal due the lender on a loan at the time the claim is<br>approved from the loan guarantee fund.4."Qualified revenue-producing enterprise" means any real property, buildings,<br>improvements on the property or to the buildings, any equipment located on the<br>property or in the buildings, and any personal property used or useful in connection<br>with a revenue-producing enterprise engaged in any industry or business not<br>prohibited by the Constitution of North Dakota or the laws of this state. The term<br>does not include an enterprise for which a person is eligible under section 6-09-15.5<br>or chapter 6-09.8.6-09.15-02. Loan guarantee fund - Administration. A beginning entrepreneur loanguarantee fund is created to be used by the Bank of North Dakota to administer a beginning<br>entrepreneur loan guarantee program to be used in conjunction with other loan programs. The<br>fund includes moneys appropriated by the legislative assembly for administration of the program<br>and all earnings, less any administrative charges, from the investment of those moneys. The<br>Bank may retain any administrative charges necessary for the administration of the program<br>established by this chapter. The fund is not subject to section 54-44.1-11.6-09.15-03. Application for guarantee - Term - Annual fee. A lender may apply to theBank of North Dakota for a loan guarantee for a loan of up to one hundred thousand dollars. The<br>Bank may approve a guarantee of a loan of up to five thousand dollars to a beginning<br>entrepreneur for use by the beginning entrepreneur for accounting, legal, and business planning<br>and other consulting or advisory services in planning for the establishment of a qualified<br>revenue-producing enterprise. The Bank may approve a guarantee of a loan of up to twenty-five<br>thousand dollars to a beginning entrepreneur without requiring the beginning entrepreneur to<br>provide collateral for the loan. The term of a loan guarantee may not exceed five years. The<br>Bank may charge a lender an annual fee during the term of a loan guarantee. Total outstanding<br>guarantees under this program at the time of issuance may not exceed five percent of the Bank's<br>tier one capital as defined by the department of financial institutions.6-09.15-04. Termination. The Bank of North Dakota may terminate a loan guaranteeupon the sale, exchange, assignment, or transfer of the beginning entrepreneur's interest in the<br>qualified revenue-producing enterprise. The Bank shall terminate a loan guarantee if the BankPage No. 1determines that the loan guarantee was obtained by fraud or material misrepresentation of which<br>the lender or seller has actual knowledge.6-09.15-05. Rules. Notwithstanding any provision of this chapter, the Bank of NorthDakota shall adopt rules to implement this chapter.The rules may include a formula fordetermining the ratio of reserves in the loan guarantee fund to the amount of guaranteed loans,<br>the maximum dollar amount of a guarantee, and the maximum allowable annual interest rate on<br>a loan eligible for a guarantee.Page No. 2Document Outlinechapter 6-09.15 beginning entrepreneur loan guarantee program]]>