OAR 123-017-0015: Eligibility

(1) Eligible projects are business development projects as defined in OAR 123-017-0010(2). If the Department is unable to obtain a sufficient number of approvable applications to meet the requirements of ORS 285B.059(5), it may, notwithstanding the limitations imposed by 285B.050(2), make loans to service and retail businesses that qualify as Emerging Small Businesses which are located in or draw their workforces from within rural or distressed areas as determined by the Department, when such projects provide compelling economic development benefits. Under this section, service and retail businesses that qualify as Emerging Small Businesses need not be engaged in traded sector activities. The amount of loans the Department may make to service and retail businesses under (1) of this section shall be limited to the amount calculated under the method described in 285B.059(5). (2) Eligible purposes are the financing of land, buildings, fixture, equipment and machinery, research and development, and the provision of working capital. (3) Eligible applicants are defined in OAR 123-017-0010(1). (4) The relocation of a facility from one labor market area to another, if not accompanied by an expansion of the applicant's business or employment, is an eligible activity if: (a) The relocation is caused by forces beyond the control of the applicant; or (b) The relocation is necessary for the continued operation of the business; or (c) There is no resulting loss of employment at the former site of the business. (5) Relending of funds shall not be an eligible activity, except that the funds may be used for the local injection share of an SBA 503 or 504 Certified Development Company transaction. (6) In cases where an otherwise eligible company or project has an insignificant (less than 25 percent) ineligible portion, the entire project may be determined eligible for a loan from the fund. (7) Other than as specified in section (6) and (10) of this rule, Fund financing will be limited to 40 percent of the amount of the eligible costs, except that Fund financing may equal up to 50 percent of eligible costs when the application is submitted through or referral for financing is made to the Department by a Financial Institution. (8) Tourist facilities shall not be eligible unless: (a) The project can be qualified as a convention center; or (b) The project can be qualified as a destination attraction with significant regional economic impact. (9) Refinancing of existing debt, including existing trade payables and delinquent taxes, shall not be eligible unless the applicant demonstrates to the satisfaction of the Finance Committee that: (a) The applicant contributes significantly to a target population or to a geographical area targeted by the Oregon Business Development Fund; (b) The applicant requires refinancing to remain viable. Assessment of viability will be made at the sole discretion of the Finance Committee; (c) Lenders agree to extend due dates, provide additional financing or provide other favorable terms to the applicant; and (d) The applicant meets all other requirements set forth in statute and administrative rule, including demonstrating to the satisfaction of the Finance Committee that the project is feasible and a reasonable risk, has a reasonable prospect of repayment and can provide good and sufficient collateral. (10) Except for the Oregon Targeted Development Account, Fund financing may exceed 50 percent of the amount of the eligible project costs and/or may be approved without a commitment from a commercial or private lender, or a local development group, to participate in the financing of the project, if (a) Two or more Financial Institutions have denied a financing request for the project by the borrower. Such denied financing request must: (A) Be for a loan for an eligible Fund loan purpose; and (B) Be evidenced by a written denial from the Financial Institution specifying the reason(s) for the denial. Denial for reasons such as an incomplete application, failure to provide requested information, or the requested loan is for a purpose for which or on terms under which the Financial Institution does not make loans is not acceptable as a denial of financing; and (b) The applicant certifies that there is no other available financing for the project with documentation as required by the Finance Committee. (11) Fund financing may be approved without a commitment from a commercial or private lender or a local development group to participate in the financing of the project if the applicant is a county or municipality, or if there are required forms of payments other than scheduled principal and interest.