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PRINTER'S NO. 292
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
378
Session of
2015
INTRODUCED BY YUDICHAK, GREENLEAF, VOGEL, TEPLITZ, MENSCH,
FONTANA, BREWSTER, BAKER, SCHWANK, TARTAGLIONE, COSTA,
HUGHES, BROWNE, RAFFERTY AND FARNESE, FEBRUARY 3, 2015
REFERRED TO COMMUNITY, ECONOMIC AND RECREATIONAL DEVELOPMENT,
FEBRUARY 3, 2015
AN ACT
Amending Title 64 (Public Authorities and Quasi-Public
Corporations) of the Pennsylvania Consolidated Statutes, in
Commonwealth financing authority, establishing the Veteran-
owned Business Loan Guarantee Program.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 64 of the Pennsylvania Consolidated
Statutes is amended by adding a section to read:
ยง 1559. Veteran-owned Business Loan Guarantee Program.
(a) Establishment.--The Veteran-owned Business Loan
Guarantee Program is established. The program shall provide loan
guarantees to commercial lending institutions that make loans to
veteran-owned businesses.
(b) Application for enrollment.--A commercial lending
institution may apply for enrollment in the program authorized
under this section. The application shall be on the form
prescribed by the board and shall include or demonstrate all of
the following:
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(1) The name and address of the commercial lending
institution and the name and title of the individual who will
serve as the point of contact for the commercial lending
institution.
(2) A statement defining the service area of the
commercial lending institution.
(3) A statement describing the commercial lending
activities engaged in by the commercial lending institution
and how the commercial lending institution intends to expand
the activities as a result of its participation in the
program authorized by this section.
(4) Any other information required by the board.
(c) Enrollment approval.--Upon being satisfied that all
requirements have been met, the board may enroll the commercial
lending institution in the program authorized under this
section, and, if enrolled, the authority shall execute a master
guarantee agreement in favor of the commercial lending
institution. In addition to any other terms and conditions
required by the board, the master guarantee agreement shall
provide for the following:
(1) The procedure for the submission of a claim for
payment by the commercial lending institution. The procedure
shall require that the commercial lending institution
demonstrate that it has exhausted all available remedies
against the borrower, other guarantors and collateral for the
loan before seeking payment under the agreement.
(2) A requirement that a percentage of any money
recovered by the commercial lending institution subsequent to
any payment made under the master guarantee agreement by the
authority be remitted to the authority.
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(3) Periodic reporting requirements by the commercial
lending institution regarding itself and regarding the loans
for which guarantee certificates have been issued under this
section.
(d) Application for guarantee.--A commercial lending
institution enrolled in the program authorized under this
section may submit an application to the authority for the
guarantee of a proposed loan. The application shall be on the
form prescribed by the board and shall include or demonstrate
all of the following:
(1) The name and address of the borrower, the type of
business the borrower conducts, the location and age of the
business and the names and addresses of the principals of the
borrower.
(2) The number of projected new or retained employees of
the borrower as a result of the loan.
(3) A copy of the borrower's last two years of financial
statements prepared or reported on by an independent
certified public accountant, if available.
(4) A statement describing the purpose of the loan, the
requested amount of the loan, a copy of the commercial
lending institution's commitment letter and applicable credit
underwriting that supports the repayment of the loan,
including the collateral and other guarantees offered by the
borrower to support the loan.
(5) Any other information required by the board.
(e) Application review.--
(1) The board shall review the application to determine
all of the following:
(i) That the borrower owns and operates a veteran-
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owned business.
(ii) That the borrower is financially responsible
and has the ability to repay the loan.
(iii) That the use of loan proceeds by the borrower
will result in jobs being created or retained within this
Commonwealth.
(iv) That the borrower's business is located within
the commercial lending institution's service area and
within this Commonwealth.
(v) That the borrower and the commercial lending
institution have met all other requirements established
by the board.
(2) Upon being satisfied that all requirements have been
met, the board may approve the guarantee, and, if approved,
the authority shall issue a guarantee certificate for the
loan to the commercial lending institution stating the terms
and amount of the guarantee.
(3) The board may establish a subcommittee composed of
one or more members of the board and staff of the department
to review and approve applications for guarantees under this
section.
(f) Limitations.--
(1) A guarantee may not exceed 50% of the outstanding
principal amount of a loan during the term of a loan for
which a guarantee certificate has been issued.
(2) A guarantee may not exceed $250,000 for any one
loan.
(g) Account.--The sum of $5,000,000 shall be transferred
from the Second Stage Loan Program into a trust account
established by the board for purposes of providing loan
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guarantees under this section.
Section 2. This act shall take effect in 60 days.
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