§ 41-43-160 — Loan programs; authorized purposes; authority's powers as to loans.

South Carolina § 41-43-160

• Jurisdiction: South Carolina
• Title 41: LABOR AND EMPLOYMENT
• Ch. 43: SOUTH CAROLINA JOBS - ECONOMIC DEVELOPMENT FUND ACT

Text

The authority may utilize any of its program funds to establish loan programs pursuant to this section for the purpose of reducing the cost of capital to business enterprises which meet the eligibility requirements of Section 41-43-150. Proceeds of loans under this section are utilized: (i) to acquire, by construction or purchase, land and buildings or other improvements thereon, machinery, equipment, office furnishings or other depreciable assets, or for research and design costs, legal and accounting fees, or other expenses in connection with the acquisition or construction thereof; or (ii) for the research, testing, and developing of new products, machinery, equipment, and industrial or commercial processes, and the initial marketing thereof. Loan proceeds also may be used to finance working capital. The authority shall require as a condition of each loan made pursuant to this section that the loan must be serviced by a loan administrator which meets criteria established by the authority. The authority may make direct loans to any eligible business enterprises upon terms which require the proceeds of the loan to be used for qualified purposes and upon such other terms and conditions as the authority may require. The authority may make loans to lending institutions upon terms and conditions which require each lending institution to disburse the loan proceeds for new loans to eligible businesses for qualified purposes in an aggregate principal amount of not less than the amount of the loan. The authority must require of each lender to which it has made a loan evidence satisfactory to it of the making of new loans which satisfy the requirements of this item and of the regulations of the authority. In this connection, the authority, through its agents, may inspect the books and records of such lender to verify that the requirements are being met. The authority must require that each lender receiving a loan pursuant to this section issue and deliver to the authority evidence of its indebtedness to the authority which constitutes a general obligation of the lender. The evidence of indebtedness must bear a date, time of maturity, be subject to prepayment, and contain any other provisions consistent with this section and related to protecting the security of the authority's investment and the bonds issued by the authority in connection with such loan. The authority may purchase, and make advance commitments to purchase, from lending institutions loans to eligible business enterprises. The purchase price for each loan which the authority purchases pursuant to this paragraph is not to exceed the total of the unpaid principal balance of the loan purchased plus accrued interest. The authority must require each lender from which the authority purchases, or commits to purchase, a loan to submit evidence satisfactory to the authority that the loan satisfies the conditions of this section and of the regulations of the authority. In this connection, the authority, through its agents, may inspect the books and records of a lender to verify that the conditions have been met. The authority must require the recording of an assignment of each mortgage or secured loan purchased by it from a lender and need not notify the borrower of its purchase of the mortgage or secured loan. The authority is not required to inspect or take possession of the loan documents if the lender from which the loan document is purchased enters into a contract to service the loan and account for it to the authority. The authority may: (i) renegotiate a loan in default, waive a default, or consent to the modification of the terms of a loan; (ii) forgive or forbear all or part of a loan; (iii) prosecute and enforce a judgment in any action, including but not limited to a foreclosure action; (iv) protect or enforce any right conferred upon it by law, or by any loan, contract, or other agreement. In connection with any action, the authority may bid for and purchase collateral or take possession of it, administer it, or pay the principal of and interest on any obligation incurred in connection with the collateral and dispose of and otherwise deal with the property securing the loan in default.

Legislative History

HISTORY: 1983 Act No. 145 SECTION 17; 1992 Act No. 404, SECTION 6, eff July 1, 1992. Effect of Amendment The 1992 amendment, in the next-to-last sentence of the first paragraph, deleted the condition, for loan proceeds to be used to finance working capital, that the business be located in a distressed area or that the proceeds be intended to finance the sale of certain exports; and added the last sentence of the first paragraph.