§ 15-5-1107 - Enrollment of qualified loan in program -- Procedure -- Fee -- Transfers to loss reserve account. - Arkansas Statutes

15-5-1107. Enrollment of qualified loan in program -- Procedure -- Fee -- Transfers to loss reserve account.

(a) (1) When a financial institution participates in the Arkansas Capital Access Program for Small Business, if the financial institution decides to enroll a qualified loan under the program in order to obtain the protection against loss provided by its loss reserve account, the financial institution shall notify the Arkansas Development Finance Authority of the loan within ten (10) days after the loan is made.

(2) The notification shall be in writing on a form prescribed by the authority.

(b) (1) When making a qualified loan that will be enrolled under the program, the financial institution shall require the qualified business to which the loan is made to pay a fee of not less than one and one-half percent (1.5%) of the principal amount of the loan but not more than three and one-half percent (3.5%) of the principal amount.

(2) (A) The financial institution shall also pay a fee in an amount equal to the fee paid by the borrower.

(B) However, the financial institution may collect the amount of its fee from the qualified borrower.

(3) The financial institution shall deliver the fees collected under this subsection to the authority for deposit in the loss reserve account for the institution.

(c) When depositing fees collected under subsection (b) of this section to the credit of the loss reserve account for a financial institution, the authority shall transfer an amount that is not less than the total amount of the fees paid by the borrower and the financial institution from the Capital Access Fund to the loss reserve account for the institution.