Chapter 4.42
SMALL BUSINESS GUARANTEED LOAN PROGRAM
Sections:
4.42.010 Establishment.
4.42.020 Loan guarantee amounts available as expressed in dollars and in percentages of loans.
4.42.030 Eligibility for lenders to participate.
4.42.040 Eligibility of loans for guarantees.
4.42.050 Procedure for deciding upon applications for loan guarantees.
4.42.060 Disclosure to assembly of approved applications.
4.42.065 Disaster business loan guarantees.
4.42.010 Establishment.
There shall be established the small business guaranteed loan program. A majority of a committee composed of the administrator and two members of the long-range planning and economic development commission designated by that commission is authorized to issue on behalf of the city and borough guarantees of private-sector loans to small businesses under the conditions set out in this chapter. (Ord. 03-1719 § 4 (part), 2003.)
4.42.020 Loan guarantee amounts available as expressed in dollars and in percentages of loans.
The maximum loan eligible for participation in the program established by this chapter is seventy-five thousand dollars. The maximum amount that may be guaranteed by the city and borough under this chapter is thirty-seven thousand five hundred dollars. The maximum percentage of a loan that may be guaranteed by the city and borough under this chapter is seventy-five percent. The relationships between the loan guarantee amounts available as expressed in percentages of the loan are shown in the following table:
|
Loan Amount |
Guarantee Percentage |
Maximum Guarantee |
Disaster Loan Maximum Guarantee |
|---|---|---|---|
|
Less than $15,000 |
75% |
$11,250 |
$11,250 |
|
$15,000 – less than $35,000 |
70% |
$24,500 |
$26,250 |
|
$35,000 – less than $55,000 |
60% |
$33,000 |
$41,250 |
|
$55,000 – $75,000 |
50% |
$37,500 |
$56,250 |
(Ord. 05-01 § 4 (part), 2005; Ord. 03-1719 § 4 (part), 2003.)
4.42.030 Eligibility for lenders to participate.
A lender interested in making loans guaranteed under this chapter shall submit to the administrator a letter of interest describing the lender’s qualifications to make loans to businesses based within the city and borough. No loan guarantee shall be made under this chapter until the administrator has approved in writing the lender’s application to participate in the program established under this chapter. (Ord. 03-1719 § 4 (part), 2003.)
4.42.040 Eligibility of loans for guarantees.
A lender who has been approved to participate in this program under Section 4.42.030 and desires to have a loan considered for a loan guarantee under this chapter shall submit an application to the administrator describing the loan. Such application shall include a statement signed by an officer of the lender certifying that:
A. The loan would be for a business based in the city and borough that in the lender’s judgment carries a substantial likelihood of growth and/or future success;
B. The loan will not be used to pay off existing debt;
C. The loan will not be used for acquiring property to be held for investment purposes;
D. The loan will not be used for speculative purposes;
E. The loan will not be used for lending activities;
F. The loan will not be used for a pyramid sales plan;
G. The loan will not be used for illegal activities; and
H. The loan will not be used to violate the First Amendment of the United States Constitution.
(Ord. 03-1719 § 4 (part), 2003.)
4.42.050 Procedure for deciding upon applications for loan guarantees.
A majority of the committee described in Section 4.42.010 shall review the loan application submitted by the approved lender and consult with the finance director. A majority of the committee described in Section 4.42.010 shall approve the application and issue the loan guarantee under the schedule set out in Section 4.42.020 if it meets the criteria set out in Section 4.42.040 and the finance director certifies in writing that:
A. The funds to make the loan guarantee are available as part of funding allocations previously made by the assembly and shall be accounted for in future reports to the assembly; and
B. The business which is the subject of the loan guarantee has all necessary licenses and permits to do business with the city and borough and does not owe any delinquent sales taxes or property taxes.
(Ord. 03-1719 § 4 (part), 2003.)
4.42.060 Disclosure to assembly of approved applications.
The identity of the lender getting the loan guarantee, the business getting the loan, the amount of the loan guarantee, and the amount of the loan shall be provided to the assembly in a writing from the administrator no later than the assembly meeting immediately following the issuance of the loan guarantee. (Ord. 03-1719 § 4 (part), 2003.)
4.42.065 Disaster business loan guarantees.
Under certain circumstances involving natural or manmade disasters, the assembly may authorize the issuance of disaster business loan guarantees. The disaster business loan guarantees will be granted in accordance with this chapter, except that all loan amounts would be guaranteed at seventy-five percent, notwithstanding any provision of this chapter. (Ord. 05-01 § 4 (part), 2005.)