6 Miss. Code. R. 9-5.5
Participants must use SBLF funding in accordance with Treasury regulations promulgated for the SSBCI program, including 31 C.F.R. Subtitle A, Part 35, Subpart C.
Participants must use SBLF funds for the provision of capital to eligible borrowers. Requirements for eligible SBLF transactions and borrowers are as follows:
* 100% of SBLF funding must be used for Mississippi companies;
* No more than 50% of SSBCI funds in an individual transaction;
* Participants are required to:
* target an average borrower or investee size of 500 employees or less,
* not extend credit or investment support to borrowers or investees that have more than 750 employees,
* target support towards loans or investments with an average principal or investment amount of $5 million or less, and
* not provide credit or investment support if a given transaction exceeds $20 million.
* Eligible transactions may not enroll any portion of an SBA-guaranteed loan or the unguaranteed portion of any other federal loan, including the U.S. Department of Agriculture's Business and Industry (USDA B&I) loan program loan.
* One loan cannot be enrolled in more than one approved program at the same time. A lender may not divide one loan into multiple agreements or notes, each enrolled in an approved program, for the same loan purpose.
* a borrower may receive two sources of federal support in two separate loans if the proceeds for the two loans are for different purposes.
* Eligible business purposes for SBLF transactions include, but are not limited to:
* Start-up costs, working capital, franchise fees,
* Acquisition of equipment,
* Inventory
* Services used in the production, manufacturing, or delivery of a business's goods or services, or in the purchase, construction, renovation, or tenant improvements of an eligible place of business that is not for passive real estate investment purposes, or
* The purchase of any tangible or intangible assets except goodwill.
While SBLF funds cannot be combined with tax-credit enabled funds at the state level, Federal New Market Tax Credits (NMTC), or Historic Tax Credits to make the one-to-one match, SSBCI funds can be used alongside Historic Tax Credits and NMTCs in an individual transaction, but they may not count towards a fund's overall leverage.
* Eligible small business borrowers may not:
* Be a business where any principal of the company has been convicted of a sex offense against a minor;
* Be a business engaged in speculative activities that profit from fluctuations in price, such as wildcatting for oil and dealing in commodities futures, unless those activities are incidental to the regular activities of the business and part of a legitimate risk management strategy to guard against price fluctuations or through the normal course of trade;
* Be a business that earns more than half of its annual net revenue from lending activities, unless the business is:
* a CDFI that is not a depository institution or a bank holding company, or
* a Tribal enterprise lender that is not a depository institution or a bank holding company;
* Be a business engaged in pyramid sales, where a participant's primary incentive is based on the sales made by an ever-increasing number of participants;
* Be a business engaged in activities that are prohibited by state and/or federal law, or
* Be a business deriving more than one-third of gross annual revenue from legal gambling activities.
The participant must secure an assurance from each borrower affirming that the borrower is not:
* An executive officer, director, or principal shareholder of the financial institution lender;
* A related interest or immediate family member of such an executive officer, director, or principal shareholder of the financial institution lender.
* A related interest or immediate family member of such an executive officer, director, or principal shareholder of the financial institution lender.
For purposes of these three borrower restrictions, the terms "executive officer," "director," "principal shareholder," "immediate family," and "related interest" refer to the same relationship to a financial institution lender as the relationships described in 12 C.F.R. part 215.
Permissible borrowers may include jurisdiction-designated charitable, religious, or other non-profit or philanthropic institutions; government-owned corporations; consumer and marketing cooperatives; and faith-based organizations, provided the loan is for a "business purpose" as defined above. Permissible borrowers may also include sole proprietors, independent contractors, worker cooperatives, and other employee-owned entities, as well as Tribal enterprises, provided that all applicable program requirements are satisfied.
6 Miss. Code. R. 9-5.5