§ 2.2-2311. Creation, administration, and management of the Capital AccessFund for Disadvantaged Businesses.
A. For the purposes of this section:
"Disadvantaged business" means a for-profit small business concern that ismajority-owned by one or more economically disadvantaged individuals. In thecase of a corporation, a majority of the stock shall be owned by one or moresuch individuals and the management and daily business operations shall becontrolled by one or more of the economically disadvantaged individuals whoown it.
"Economically disadvantaged individual" means an individual whose abilityto compete in the free market has been impaired due to diminished capital andcredit opportunities as compared to others in the same or similar line ofbusiness and competitive market area.
B. There is created in the state treasury a permanent nonreverting fund to beknown as the Capital Access Fund for Disadvantaged Businesses (the Fund). TheFund shall be comprised of (i) moneys appropriated to the Fund by the GeneralAssembly, (ii) all income from the investment of moneys held by the Fund, and(iii) any other moneys designated for deposit to the Fund from any source,public or private. Interest earned on moneys in the Fund shall remain in theFund and be credited to it. Any moneys remaining in the Fund, includinginterest thereon, at the end of each fiscal year shall not revert to thegeneral fund but shall remain in the Fund. Moneys in the Fund shall be usedto provide loan guarantees, loan loss reserves, and interest rate writedowns. The Fund shall be managed by the Department of Minority BusinessEnterprise (the Department) and administered by the Virginia Small BusinessFinancing Authority (the Authority).
C. The operation of the Fund shall be as follows:
1. The Fund may be used as a special reserve fund to cover potential futurelosses from the loan portfolios of participating banks and lendinginstitutions. The Authority shall (i) establish with one or more banks andlending institutions one or more accounts or pools for the Capital AccessFund for Disadvantaged Businesses and (ii) deposit into such accounts orpools moneys from the Fund in an amount at least equal to the total of thesum of the bank or lending institutions and the individual borrower'sdeposits, cash equivalents or other acceptable securities, including but notlimited to letters of credit, for each loan sought to be covered for futurelosses. Such matching sum by the Authority shall not exceed fourteen percentof the principal amount of the loan. The Authority may require up to a onehundred percent match by the individual borrowers pursuant to establishedguidelines.
2. The Fund may also be used to guarantee up to ninety percent of theprincipal amount of any loan to cover potential future losses from the loanportfolios of participating banks and lending institutions to cover specificloans on such terms and conditions as set forth in established guidelines.Such guarantees shall not exceed a term of five years.
3. The Fund may also be used to provide interest rate write downs or otherpayments to achieve a concessionary rate of interest that shall be limited toseven percent of the balance of the Fund that is unencumbered by any specialreserves or guarantees or the income earned by the Fund from all sourcesincluding fees, interest, or other investment income. No interest rate writedown or payment to achieve a concessionary rate shall extend for more thanfive years and such rates shall include provisions for an increase in suchrates to a near market rate but not more than the prime rate.
4. Provisions may be made for a borrower to use a combination of subdivisionsC. 1., C. 2., and C. 3. pursuant to established guidelines.
D. The determination of economic disadvantage shall be made by the Directorof the Department of Minority Business Enterprise pursuant to the guidelinesdeveloped in accordance with subsections B and C.
E. The Department and the Authority, or their designated agents, shalldetermine the qualifications, terms, and conditions for the use of the Fundand the accounts thereof. In connection with applications for claims madeagainst the Fund, the Department may require the production of any document,instrument, certificate, legal opinion, or any other information it deemsnecessary or convenient. All claims made against the Fund shall be approvedby the Department and the Authority.
(1999, cc. 765, 791, § 2.1-64.34:1; 2001, cc. 224, 844.)
§ 2.2-2311. Creation, administration, and management of the Capital AccessFund for Disadvantaged Businesses.
A. For the purposes of this section:
"Disadvantaged business" means a for-profit small business concern that ismajority-owned by one or more economically disadvantaged individuals. In thecase of a corporation, a majority of the stock shall be owned by one or moresuch individuals and the management and daily business operations shall becontrolled by one or more of the economically disadvantaged individuals whoown it.
"Economically disadvantaged individual" means an individual whose abilityto compete in the free market has been impaired due to diminished capital andcredit opportunities as compared to others in the same or similar line ofbusiness and competitive market area.
B. There is created in the state treasury a permanent nonreverting fund to beknown as the Capital Access Fund for Disadvantaged Businesses (the Fund). TheFund shall be comprised of (i) moneys appropriated to the Fund by the GeneralAssembly, (ii) all income from the investment of moneys held by the Fund, and(iii) any other moneys designated for deposit to the Fund from any source,public or private. Interest earned on moneys in the Fund shall remain in theFund and be credited to it. Any moneys remaining in the Fund, includinginterest thereon, at the end of each fiscal year shall not revert to thegeneral fund but shall remain in the Fund. Moneys in the Fund shall be usedto provide loan guarantees, loan loss reserves, and interest rate writedowns. The Fund shall be managed by the Department of Minority BusinessEnterprise (the Department) and administered by the Virginia Small BusinessFinancing Authority (the Authority).
C. The operation of the Fund shall be as follows:
1. The Fund may be used as a special reserve fund to cover potential futurelosses from the loan portfolios of participating banks and lendinginstitutions. The Authority shall (i) establish with one or more banks andlending institutions one or more accounts or pools for the Capital AccessFund for Disadvantaged Businesses and (ii) deposit into such accounts orpools moneys from the Fund in an amount at least equal to the total of thesum of the bank or lending institutions and the individual borrower'sdeposits, cash equivalents or other acceptable securities, including but notlimited to letters of credit, for each loan sought to be covered for futurelosses. Such matching sum by the Authority shall not exceed fourteen percentof the principal amount of the loan. The Authority may require up to a onehundred percent match by the individual borrowers pursuant to establishedguidelines.
2. The Fund may also be used to guarantee up to ninety percent of theprincipal amount of any loan to cover potential future losses from the loanportfolios of participating banks and lending institutions to cover specificloans on such terms and conditions as set forth in established guidelines.Such guarantees shall not exceed a term of five years.
3. The Fund may also be used to provide interest rate write downs or otherpayments to achieve a concessionary rate of interest that shall be limited toseven percent of the balance of the Fund that is unencumbered by any specialreserves or guarantees or the income earned by the Fund from all sourcesincluding fees, interest, or other investment income. No interest rate writedown or payment to achieve a concessionary rate shall extend for more thanfive years and such rates shall include provisions for an increase in suchrates to a near market rate but not more than the prime rate.
4. Provisions may be made for a borrower to use a combination of subdivisionsC. 1., C. 2., and C. 3. pursuant to established guidelines.
D. The determination of economic disadvantage shall be made by the Directorof the Department of Minority Business Enterprise pursuant to the guidelinesdeveloped in accordance with subsections B and C.
E. The Department and the Authority, or their designated agents, shalldetermine the qualifications, terms, and conditions for the use of the Fundand the accounts thereof. In connection with applications for claims madeagainst the Fund, the Department may require the production of any document,instrument, certificate, legal opinion, or any other information it deemsnecessary or convenient. All claims made against the Fund shall be approvedby the Department and the Authority.
(1999, cc. 765, 791, § 2.1-64.34:1; 2001, cc. 224, 844.)
§ 2.2-2311. Creation, administration, and management of the Capital AccessFund for Disadvantaged Businesses.
A. For the purposes of this section:
"Disadvantaged business" means a for-profit small business concern that ismajority-owned by one or more economically disadvantaged individuals. In thecase of a corporation, a majority of the stock shall be owned by one or moresuch individuals and the management and daily business operations shall becontrolled by one or more of the economically disadvantaged individuals whoown it.
"Economically disadvantaged individual" means an individual whose abilityto compete in the free market has been impaired due to diminished capital andcredit opportunities as compared to others in the same or similar line ofbusiness and competitive market area.
B. There is created in the state treasury a permanent nonreverting fund to beknown as the Capital Access Fund for Disadvantaged Businesses (the Fund). TheFund shall be comprised of (i) moneys appropriated to the Fund by the GeneralAssembly, (ii) all income from the investment of moneys held by the Fund, and(iii) any other moneys designated for deposit to the Fund from any source,public or private. Interest earned on moneys in the Fund shall remain in theFund and be credited to it. Any moneys remaining in the Fund, includinginterest thereon, at the end of each fiscal year shall not revert to thegeneral fund but shall remain in the Fund. Moneys in the Fund shall be usedto provide loan guarantees, loan loss reserves, and interest rate writedowns. The Fund shall be managed by the Department of Minority BusinessEnterprise (the Department) and administered by the Virginia Small BusinessFinancing Authority (the Authority).
C. The operation of the Fund shall be as follows:
1. The Fund may be used as a special reserve fund to cover potential futurelosses from the loan portfolios of participating banks and lendinginstitutions. The Authority shall (i) establish with one or more banks andlending institutions one or more accounts or pools for the Capital AccessFund for Disadvantaged Businesses and (ii) deposit into such accounts orpools moneys from the Fund in an amount at least equal to the total of thesum of the bank or lending institutions and the individual borrower'sdeposits, cash equivalents or other acceptable securities, including but notlimited to letters of credit, for each loan sought to be covered for futurelosses. Such matching sum by the Authority shall not exceed fourteen percentof the principal amount of the loan. The Authority may require up to a onehundred percent match by the individual borrowers pursuant to establishedguidelines.
2. The Fund may also be used to guarantee up to ninety percent of theprincipal amount of any loan to cover potential future losses from the loanportfolios of participating banks and lending institutions to cover specificloans on such terms and conditions as set forth in established guidelines.Such guarantees shall not exceed a term of five years.
3. The Fund may also be used to provide interest rate write downs or otherpayments to achieve a concessionary rate of interest that shall be limited toseven percent of the balance of the Fund that is unencumbered by any specialreserves or guarantees or the income earned by the Fund from all sourcesincluding fees, interest, or other investment income. No interest rate writedown or payment to achieve a concessionary rate shall extend for more thanfive years and such rates shall include provisions for an increase in suchrates to a near market rate but not more than the prime rate.
4. Provisions may be made for a borrower to use a combination of subdivisionsC. 1., C. 2., and C. 3. pursuant to established guidelines.
D. The determination of economic disadvantage shall be made by the Directorof the Department of Minority Business Enterprise pursuant to the guidelinesdeveloped in accordance with subsections B and C.
E. The Department and the Authority, or their designated agents, shalldetermine the qualifications, terms, and conditions for the use of the Fundand the accounts thereof. In connection with applications for claims madeagainst the Fund, the Department may require the production of any document,instrument, certificate, legal opinion, or any other information it deemsnecessary or convenient. All claims made against the Fund shall be approvedby the Department and the Authority.
(1999, cc. 765, 791, § 2.1-64.34:1; 2001, cc. 224, 844.)
