Section 3.99.720. Application.

	(a)  The authority will accept an application for a guarantee only from the financial institution that will make the loan and that has the ability to originate, service and collect the loan. An application must contain information sufficient to allow the authority to determine whether the loan is eligible for a guarantee under the limitations stated in AS 44.88.500 -  44.88.599. An application must be accompanied by evidence, satisfactory to the authority, that the financial institution has conducted a credit investigation and by a statement of the financial institution's determinations based upon the credit investigation.  
	(b)  The application for a loan guarantee of $100,000 or less for a new loan may consist of the following:  
		(1) a loan summary, including the financial institution's loan approval;  
		(2) certification from the bank that a credit check has been performed, that the borrower's credit record is satisfactory to the bank, that any other bank-held debt is current, and that all statutory requirements have been met; and  
		(3) such other information the authority considers necessary to evaluate the borrower and the project.  
	(c)  The application for a loan guarantee of more than $100,000 for a new loan must contain  
		(1) a loan summary, including the financial institution's loan approval;  
		(2) a copy of the signed loan application;  
		(3) a balance sheet and a profit-and-loss statement of the borrower's business, that is current to within 90 days of the application date and signed by the borrower;  
		(4) a description of the project;  
		(5) a current credit report of the borrower and of any other guarantors and co-borrowers;  
		(6) copies of the borrower's federal income tax returns or financial statements for the preceding three fiscal years;  
		(7) a detailed description of the use of the loan proceeds;  
		(8) a description and evaluation of the collateral to be used to secure the loan;  
			(A) if the loan is to be secured by real property, a written appraisal report acceptable to the authority estimating the fair market value of the real property;  
				(i) if the total loan amount is equal to or less than $1,000,000, the appraisal shall be a summary appraisal report prepared in accordance with the most current edition of the Uniform Standards of Professional Appraisal Practice established by the Appraisal Standards Board of The Appraisal Foundation;  
				(ii) if the total loan amount is greater than $1,000,000, the appraisal shall be a self-contained appraisal report prepared in accordance with the most current edition of the Uniform Standards of Professional Appraisal Practice established by the Appraisal Standards Board of The Appraisal Foundation;  
			(B) if the loan is to be secured by tangible personal property, an appraisal in a format acceptable to the authority prepared by an appraiser who is acceptable to the authority;  
		(9) a finding that the borrower has adequate projected cash flow to service the debt;  
		(10) an environmental risk assessment satisfactory to the authority, followed by an environmental audit if required by the authority; and  
		(11) any other information considered necessary by the authority in order to evaluate the borrower and the project.  
	(d)  The application for a guarantee of a loan to refinance existing debt must contain the items described or listed in 3 AAC 99.720(a), (b) and (c)(1) - (c)(11) and must also contain the following:  
		(1) a debt schedule that  
			(A) correlates to the business' latest balance sheet; and  
			(B) reflects the debt to be refinanced, including name of creditor, original loan amount and loan balance, date of loan, and maturity date, together with statements as to whether the loan is paid monthly, annually, or otherwise, as to payment status and payment history of the loan, and as to the collateral that secured the loan;  
		(2) an evaluation completed by the financial institution which illustrates how the guarantee of a loan to refinance existing debt will satisfy AS 44.88.525; and  
		(3) a statement by the financial institution whether the loan being refinanced has been criticized or classified by any regulatory agency or internal audit as a high risk or under-collateralized loan.  
	(e)  The authority may waive any provision in this section.  
	(f)  Repealed 2/8/2001.  

Authorities

44.88.080;44.88.085;44.88.510;44.88.520

Notes

Reference

3 AAC 99.720
3 AAC 99.750
3 AAC 99.760

Authority

AS 44.88.080 AS 44.88.085 AS 44.88.510 AS 44.88.520

History

Eff. 8/1/88, Register 107; am 11/30/90, Register 118; am 7/19/91, Register 119; am 9/25/92, Register 124; am 12/2/94, Register 134; am 10/23/96, Register 141; am 2/11/99, Register 150; am 2/8/2001, Register 158