§ 106.6. Application submission and approval procedure.
(a) The Department will review each application in the order it is received. Applications shall be submitted through an ALO or local service provider. The applicant is responsible for updating the application if changes occur during the review. Failure to do so may result in the application being declared ineligible or, if approved, the loan approval may be withdrawn.
(b) The Department will formally notify the ALO or local service provider of its decision to approve or reject a loan application within 30 business days of receipt of the completed loan application from the ALO or local service provider.
(c) Approved projects will receive a loan approval memorandum. The ALO or local service provider shall sign and return the loan approval memorandum within 30 days. Once accepted by the ALO or local service provider, the loan approval memorandum is valid for 90 days.
(d) Before the Department will authorize disbursement of loan funds, the ALO or local service provider shall confirm:
(1) All other sources of funding will be in place at the time of closing.
(2) The use of the funds remains as presented in the project application.
(3) There are no material changes to collateral or other terms and conditions of the loan as previously approved by the Department.
(4) The loan will close into an escrow account.
(5) The conditions of the ALO or local service provider’s commitment letter with the applicant have been satisfied.
(6) The Federal Employee Identification Number (FEIN) and Social Security numbers of the applicant, occupant and all guarantors.
(7) The principals are residents of this Commonwealth.
(8) The project will have expected sales of $1,000 or more per year.
(9) The APDP applicant has applied to be registered as an artificial propagator.
(10) The total number of jobs created or preserved by the proposed project.
(11) The number of jobs to be created or retained per APDP dollar invested.
(12) The dollar amount of private investment to be leveraged as a result of the APDP investment.
(13) The strategic importance to the Commonwealth of the business and the borrower being assisted or the area being served, or both.
(14) The collateral position of the Department will not be less than a second lien on the assets being funded unless specifically approved in writing by the Department. The approval shall only be considered when the appraisal of assets shows sufficient value to cover all liens of the Department if the assets were to be sold at a bankruptcy sale.
(e) Material changes in project application, collateral or terms shall be reviewed by the ALO or local service provider, and recommended to and approved by the Department.
(f) The ALO or local service provider will make arrangements to close the APDP loan within 7 business days of the selected closing date. If the APDP loan does not close within that time period, the ALO or local service provider shall return the APDP funds to the Department.
(g) The APDP loan funds will be disbursed at the loan closing between the ALO or local service provider and the borrower. The APDP loan proceeds may be disbursed to the borrower or into an escrow account with a commercial lending institution. Interest will accrue on the APDP loan from the date of closing. Unless otherwise agreed to by the ALO or local service provider, with the approval of the Department, regular amortization payments of principal and accrued interest on the APDP loan will begin at time of closing whether or not the loan is disbursed in whole or in part into escrow. The first payment of principal and interest will be due the first day of the second calendar month following the calendar month in which closing occurs.
Cross References This section cited in 7 Pa. Code § 106.5 (relating to program requirements).
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