§155-6 - Participation in loans by the department. - Hawaii Statutes

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

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

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

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

     (e)  When a participating loan has been approved by the department, its share may be paid to the participating private lender for disbursement to the borrower.

     (f)  Out of interest collected, the private lender may be paid a service fee to be determined by the department which fee shall 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 is obligated to pay; and further provided that the private lender services the loan.

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

     (h)  Security for participating loans shall be limited by the provisions of section 155-11.  All collateral documents shall be held by the private lender.  Division of interest in collateral received shall be in proportion to participation by the department and the private lender. [L 1959, 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 L 1989, c 222, §2 and c 261, §8; am L 1993, c 350, §4; am L 1997, c 258, §3; am L 1999, c 32, §3; am L 2000, c 51, §7]