Chapter 5Loan Operations

Section § 32600

Explanation

This law section states that a finance officer in California cannot authorize loans unless certain conditions are met. The loan must either be backed by a guarantee from the Small Business Administration or another government entity with at least a 50% guarantee, involve participation with the Small Business Administration as a small business investment or local development company, or make up less than 16% of the total financing package with other lenders. However, these rules do not apply to loans made under a specific section, 32724.

(a)CA Financial Code § 32600(a) The finance officer shall not execute any loan that is not:
(1)CA Financial Code § 32600(a)(1) Approved for guarantee by the Small Business Administration, under that agency’s prevailing standards for loans of similar type, purpose, amount, and duration that are in effect at the time the guarantee is approved by the agency.
(2)CA Financial Code § 32600(a)(2) Approved for guarantee by another governmental loan guarantee authority, and the minimum amount of the guarantee is not less than 50 percent of the principal amount of the loan.
(3)CA Financial Code § 32600(a)(3) Made pursuant to the corporation’s participation with the Small Business Administration as a small business investment company or local development company.
(4)CA Financial Code § 32600(a)(4) Less than 16 percent of the total financing package arranged between the corporation and another lender or lenders on behalf of the applicant.
(b)CA Financial Code § 32600(b) This section does not apply to loans made pursuant to Section 32724.
finance officer loan restrictions Small Business Administration loan guarantee government loan guarantee principal amount of the loan small business investment company local development company financing package requirements co-financing with lenders Section 32724 exemption
(Amended by Stats. 1994, Ch. 929, Sec. 1. Effective January 1, 1995.)

Section § 32601

Explanation

This law states that a corporation can't offer financial support for an application unless it's a special project. Also, the application has to go through a specific review process outlined by the board.

The corporation shall not provide financing assistance on any application, except for any application submitted for review as a special project, which has not been reviewed in the manner specified by the board.
corporation financing financial support special project application review process board review application approval financing assistance restriction project review corporate financing rules application process board specified review application conditions financing criteria corporate aid limitations special project review
(Repealed and added by Stats. 1989, Ch. 1040, Sec. 18.5.)