La. Admin. Code tit. 19 § VII-7607

Current through Register Vol. 50, No. 8, August 20, 2024

Section VII-7607 - Eligibility/ Ineligibility for Participation in This Program

A. This Program is for loans (including lines of credit) for an eligible business purpose, having a principal amount of $500,000 or less, to eligible borrowers doing business in Louisiana having 100 employees or less at the time the loan is enrolled in this program. An eligible business purpose includes but is not limited to: start-up costs; working capital; business procurement; franchise fees; and acquisition of equipment, inventory, or services used in the production, manufacturing, or delivery of a business's goods or services, or the purchase, construction, renovation, or tenant improvements of an eligible place of business that is not for passive real estate investment purposes. The definition of eligible business purpose excludes activities that relate to acquiring or holding passive investments such as commercial real estate ownership for investment or leasing; the purchase of securities; and lobbying activities as defined in Section 3 (7) of the Lobbying Disclosure Act of 1995, P.L. 104-65, as amended.

B. The loan should be a new extension of credit to the borrower, and shall not be used to support existing extensions of credit, including but not limited to prior loans, lines of credit, or other borrowings that were previously made available as a part of a state small business credit enhancement program; no portion of the loan shall be used for any guaranteed or unguaranteed portion of a Small Business Administration (SBA) guaranteed loan or any other federal loan without prior written consent of the treasury; and SBA guaranteed loans shall NOT be purchased through this program.

C. In connection with the business purpose for the requested loan the applicant/borrower(s) shall create or retain in this State at least one new permanent full-time jobs.

D. In addition to the eligibility and ineligibility provisions provided in the Section, the applicant/borrowers loans and lines of credit in connection with this Chapter shall meet the following criteria:

1. the applicant/borrower(s) shall employ 100 employees or less at the time the loan is enrolled in this Program. The borrower business structure is a for-profit corporation, partnership, limited liability company, limited liability partnership, joint venture, cooperative, non-profit entity with an eligible business purpose as defined above or other entity which is registered and authorized to conduct business in the state of Louisiana that maintain an office in Louisiana.

2. the borrower business structure is a sole proprietor qualified to do business in Louisiana that maintains an office in Louisiana. Small and emerging businesses (SEBs) certified by LED's small business services that maintain an office in Louisiana.

3. small and emerging businesses (SEBs) certified by LED's Small Business Services that maintain an office in Louisiana.

4. small businesses owned by socially and economically disadvantaged individuals (SEDI) that meet the SEDI definition above;

5. small business concerns as defined above for size purposes.

E. The small business is domiciled in Louisiana with preference given to socially and economically disadvantaged individuals as defined herein this Chapter.

F. Funding request for all but the following may be considered:

1. Restaurants having been in business less than two years, except for regional or national franchises;

2. bars, saloons, daiquiri shops, operations for the sale of alcoholic popsicles and other alcoholic food items, packaged liquor stores, including any other business or project established for the principal purpose of dispensing, packaging, or distributing alcoholic beverages;

3. any establishment which has gaming or gambling as its principal business;

4. any establishment which has consumer or commercial financing as its business;

5. funding for the acquisition, renovation, or alteration of a building or property for the principal purpose of real estate speculation;

6. direct or indirect activities related to cryptocurrency;

7. any business engaged in pyramid sales;

8. any business engaged in activities that are prohibited by federal law or applicable law in the jurisdiction where the business is located or conducted. (Included in these activities is the production, servicing, or distribution of products that are to be used in connection with any illegal activity, such as but not limited to selling drug paraphernalia or operating a motel that knowingly permits illegal prostitution); this category of business includes direct and indirect marijuana businesses, as defined by SBA Standard Operating Procedures 50 10 6;

9. funding for the principal purpose of refinancing existing debt; a refinancing of a loan previously made to the borrower by the Lender or an affiliate of the lender; or a loan made in order to place under the micro lending program prior debt that is not covered under this program and that is or was owed by the borrower to the Lender or to an affiliate of the lender;

10. funding for the purpose of buying out any stockholder or equity holder by another stockholder or equity holder in a business; for the purpose of purchasing any portion of the ownership interest of any owner of the business; or for buying out any family member or reimbursing any family member;

11. funding for the purpose of reimbursing funds owed to any owner, including any equity injection or injection of capital for the business's continuance;

12. funding for paying any person to influence or attempt to influence any agency, elected official, officer or employee of a state or local Government in connection with lobbying activities, the making, award, extension, continuation, renewal, amendment, or modification of any State or Local Government contract, grant, loan or cooperative agreement as such terms are defined in 31 U.S.C. § 1352;

13. funding for paying any costs incurred in connection with:

a. any defense against any claim or appeal of the United States Government, any agency or instrumentality thereof (including the U.S. Department of Treasury), against the State of Louisiana; or

b. any prosecution of any claim or appeal against the United States Government, any agency or instrumentality thereof (including the U.S. Department of Treasury), which the state of Louisiana instituted or in which the state of Louisiana has joined as a claimant;

14. funding to be used to pay any delinquent federal or state income taxes, as well as any taxes held in trust or escrow, such as payroll taxes or sales taxes.

15. funding for the purpose of buying out any stockholder or equity holder by another stockholder or equity holder in a business;

16. funding for the purpose of establishing a park, theme park, amusement park, or camping facility.

La. Admin. Code tit. 19, § VII-7607

Promulgated by the Department of Economic Development, Office of Business Development and the Louisiana Economic Development Corporation, LR 481483 (6/1/2022), Amended LR 481923 (7/1/2022).

AUTHORITY NOTE: Promulgated in accordance with R.S. 36:104, 36:108 and 51:2312