§ 15-5-1107 — Enrollment of qualified loan - Procedure - Fee - Transfers to loss reserve account

(a) (1) When a financial institution participates in the Arkansas Capital Access Program for Small Business or the Arkansas Credit Reserve Program, if the financial institution decides to enroll a qualified loan under the Arkansas Capital Access Program for Small Business or the Arkansas Credit Reserve Program to obtain the protection against loss provided by its loss reserve account, the financial institution shall notify the Arkansas Development Finance Authority of the qualified loan within ten (10) days after the qualified loan is made. (2) The notification required under subdivision (a)(1) of this section shall be in writing on a form prescribed by the authority. (b) (1) When making a qualified loan that will be enrolled under the Arkansas Capital Access Program for Small Business, the financial institution shall require the qualified business to which the qualified loan is made to pay a fee of not less than one and five-tenths percent (1.5%) of the principal amount of the qualified loan but not more than three and five-tenths percent (3.5%) of the principal amount. (2) When making a qualified loan that will be enrolled under the Arkansas Credit Reserve Program, the financial institution shall require the qualified business to which the qualified loan is made to pay a fee of not less than one percent (1%) of the principal amount of the qualified loan. (3) (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. (4) The authority and the financial institution shall allow a qualified business to pay the fees required under this subsection using sources other than sources of the qualified business. (5) The financial institution shall deliver the fees collected under this subsection to the authority for deposit into the loss reserve account for the financial 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 financial institution.

Legislative History

Amended by Act 2013, No. 1222,§ 2, eff. 8/16/2013. Acts 1993, No. 733, § 7; 1993, No. 886, § 7.