§155-6  Participation in loans by thedepartment.  (a)  The department of agriculture may provide funds for ashare, not to exceed ninety per cent, of the principal amount of a loan made toa qualified farmer, qualified new farmer, or qualified food manufacturer by aprivate lender who is unable otherwise to lend the applicant sufficient fundsat reasonable rates.

(b)  Participating loans under this sectionshall be limited by sections 155-9 to 155-13 for purposes of class"A" through class "F", the department's share not to exceedthe maximum amounts specified therefor; provided that class "E" loansto food manufacturers shall not be subject to section 155-10.

(c)  Interest charged on the private lender'sshare of the loan shall not be more than the sum of two per cent above thelowest rate of interest charged by all state or national banks authorized toaccept or hold deposits in the State of Hawaii, on unsecured short term loansmade to borrowers who have the highest credit rating with those banks.

(d)  The private lender's share of the loan maybe insured by the department up to ninety per cent of the principal balance ofthe loan, under the provisions of section 155-5.

(e)  When a participating loan has beenapproved by the department, its share may be paid to the participating privatelender for disbursement to the borrower.

(f)  Out of interest collected, the privatelender may be paid a service fee to be determined by the department which feeshall not exceed one per cent of the unpaid principal balance of the loan;provided that this fee shall not be added to any amount which the borrower isobligated to pay; and further provided that the private lender services theloan.

(g)  The participating private lender may takeover a larger percentage or the full principal balance of the loan at any timethat it has determined, to the satisfaction of the department, that theborrower is able to pay any increased interest charges resulting.

(h)  Security for participating loans shall belimited by the provisions of section 155-11.  All collateral documents shall beheld by the private lender.  Division of interest in collateral received shallbe in proportion to participation by the department and the private lender. [L1959, c 278, pt of §1; am L Sp 1959 2d, c 1, §25; am L 1961, c 104, §1(f), (g),(h), and c 132, §2; Supp, §102-6; HRS §155-6; am L 1968, c 53, §§4, 5; am L1989, c 222, §2 and c 261, §8; am L 1993, c 350, §4; am L 1997, c 258, §3; am L1999, c 32, §3; am L 2000, c 51, §7]