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The Oregon Administrative Rules contain OARs filed through March 15, 2014
 
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DEPARTMENT OF VETERANS' AFFAIRS

 

DIVISION 13

VETERANS' SMALL BUSINESS REPAIR LOAN PROGRAM

274-013-0000

Purpose and Objective

(1) OAR chapter 274, division 013 is promulgated to carry out the provisions of 2008 Oregon Laws chapter 18 as enacted by the Oregon Legislative Assembly through House Bill 3626 §§19 and 20, effective February 11, 2008 (the “Act”). These rules, related documents and relevant determinations by the Department constitute the Department's Veterans' Small Business Repair Loan Program (the “Program”). The Program is intended, inter alia, to facilitate the delivery of appropriate financial assistance to eligible veterans and to the unremarried surviving spouses of veterans who are deceased as a result of their mobilization or deployment as provided herein.

(2) Funds appropriated for the Program by the Oregon Legislative Assembly through 2008 Oregon Laws chapter 16 (Senate Bill 5556 §48) or otherwise are, consistent with House Bill 3626 §20, deposited in the Veterans’ Small Business Repair Loan Fund (the “Fund”) established in the State Treasury, separate and distinct from the General Fund. The Department will use Fund moneys consistent with this division for the purpose of providing interest-free loans to qualified applicants whose small businesses incur setbacks during the relevant veteran's mobilization or deployment.

Stat. Auth.: 2008 OL Ch. 18 & ORS 406.005
Stats. Implemented: 2008 OL Ch. 18
Hist.: DVA 6-2008, f. 9-30-08, cert. ef. 10-1-08

274-013-0010

Definitions

For the purposes of OAR chapter 274, division 013, the following terms have the following meanings, unless the context clearly indicates otherwise:

(1) “Act” means 2008 Oregon Laws, chapter 18 as enacted by the Oregon Legislative Assembly through House Bill 3626 §19 and 20, effective February 11, 2008.

(2) "Applicant" means any Veteran (individually or with his or her spouse) or Surviving Spouse applying for a Program loan from the Department on behalf of a Small Business in which the Applicant owns a Controlling Interest.

(3) "Borrower" means any successful Applicant, and/or the Small Business in which such successful Applicant owns a Controlling Interest, approved for and provided a Program loan from the Fund by the Department.

(4) "Collateral" means property subject to a security interest, security agreement, or otherwise pledged to the Department’s satisfaction for the repayment of a Program loan.

(5) "Controlling Interest" means more than 50 percent ownership (whether individually by a Veteran or a Surviving Spouse or jointly by a Veteran and his or her spouse) of a Small Business for which a Program loan is sought.

(6) "Department" means the Department of Veterans' Affairs created under ORS 406.005.

(7) "Deployment” means an act in which an individual was ordered to active military duty on behalf of the United States of America and was deployed outside the United States as defined in the Act.

(8) “Director" means the Director of the Department of Veterans' Affairs.

(9) "Equity" means unencumbered and unpledged cash, real property or personal property owned or controlled to the Department’s satisfaction by an Applicant or the Small Business in which the Applicant owns a Controlling Interest and committed to the Department’s satisfaction for use in the Project for which a Program loan is being sought by the Applicant. The valuation of such Equity shall be subject to determination by the Department in its reasonably conservative discretion.

(10) "Funds" means moneys available to the Veterans' Small Business Repair Loan Program from the Fund.

(11) "Mobilization" means an act which an individual left his or her home station and was transferred to a mobilization site for federal service as defined in the Act.

(12) "Person" means any individual, association of individuals, joint venture, partnership, corporation, limited liability company, sole proprietorship or other legal entity.

(13) "Project" means the repair, rehabilitation, operation or maintenance of a Small Business.

(14) "Setback" means a material business disruption incurred by a Small Business due to the Veteran's Mobilization or Deployment as determined by the Department.

(15) "Small Business" means a business that:

(a) Is a corporation, partnership, sole proprietorship or other legal entity licensed and located in Oregon and formed for the purpose of making a profit, and that is independently owned and operated from all other businesses; and

(b) Employs 50 or fewer persons.

(16) "Surviving Spouse" means the unremarried surviving spouse of a Veteran deceased as a result of the Veteran's Mobilization or Deployment.

(17) "Veteran" means an individual who (by himself or herself, or jointly with a spouse) owns a Controlling Interest in a Small Business and who, at the time of the individual's Mobilization or Deployment, is:

(a) A member of the Oregon National Guard; or

(b) A member of the reserves of the Army, Navy, Air Force, Marine Corps or Coast Guard of the United States and a resident of Oregon.

(18) "Veterans' Small Business Repair Loan Program" means these rules, related documents and relevant determinations by the Department, which are designed to assist any Veterans in addressing Setbacks to their Small Businesses due to the Veteran's Mobilization or Deployment.

Stat. Auth.: 2008 OL Ch. 18 & ORS 406.005
Stats. Implemented: 2008 OL Ch. 18
Hist.: DVA 6-2008, f. 9-30-08, cert. ef. 10-1-08

274-013-0020

Eligibility

(1) To be eligible for a Program loan, an Applicant must satisfy the definition of Applicant given in OAR 274-013-0010 and meet the following criteria:

(a) The Applicant must own a Controlling Interest in a Small Business;

(b) The Small Business must have incurred a Setback due to the relevant Veteran's Mobilization or Deployment. The Department may consider factors including, but not limited to the following in determining whether or not a Small Business has incurred a Setback:

(A) Whether or not the Small Business has experienced a material diminution or loss of income, customers, suppliers, operational integrity, relative competitive position or good will;

(B) Whether or not the Small Business has experienced an extraordinary depreciation in or loss of goods or capital; and

(C) Whether or not any factor identified in Subparagraphs (A) or (B) occurred during the relevant Veteran’s Mobilization or Deploy ment or as a demonstrable consequence of such Mobilization or Deployment.

(c) The Applicant must apply to the Department for a Program loan within 12 months after the relevant Veteran’s Demobilization or the date upon which the relevant Veteran would have been Demobilized but for his or her demise while on active duty.

(d) The relevant Veteran must have been discharged under honorable conditions or been eligible for honorable discharge at the time of his or her demise while on active duty.

(2) To be eligible for a Program loan, an Applicant also must complete and deliver to the Department an application, including other information and documents as required by the Department, in a manner consistent with Program requirements.

Stat. Auth.: 2008 OL Ch. 18 & ORS 406.005
Stats. Implemented: 2008 OL Ch. 18
Hist.: DVA 6-2008, f. 9-30-08, cert. ef. 10-1-08

274-013-0030

Application Procedure

(1) The Department may, from time to time, identify forms to be completed by Applicants and require such additional information or performance with respect to any application as it deems appropriate.

(a) The Department may require an Applicant to pay an application fee of not more than $250 to recompense the Department for its reasonable expenses in processing the application.

(b) The Department may require an Applicant to enroll in and successfully complete a business management program.

(c) The Department may require an Applicant to complete a business plan, including identification of the Applicant’s proposed use of the requested Program Loan and demonstration of the ability to repay the Program loan.

(2) Each Applicant must certify in a manner acceptable to the Department that they satisfy the eligibility requirements provided in OAR 274-013-0020(1).

(3) The Department may deny applications that are incomplete or otherwise inconsistent with Program requirements, including those where an Applicant has failed to satisfy any requirements to completion of a business management program or to complete a business plan. The Department will provide notice of such a denial to an Applicant at the address listed in the application.

(4) The Department may suspend consideration of an application during such periods when it has requested and is awaiting additional information or performance from the Applicant.

(5) The Department may limit or refuse to accept applications depending upon Funds availability.

(6) The Department may consider applications in such order as it deems appropriate. The Department may consider factors including, but not limited to the following in prioritizing its consideration of applications:

(a) When the application was made;

(b) The apparent need for a Program Loan;

(c) The amount of the requested Program Loan;

(d) The potential for ongoing business disruption;

(e) Compliance by the Applicant with requests for information or performance; and

(f) The accuracy and completeness of the application.

(7) In determining whether or not to approve or deny a requested Program loan (in whole or in part), the Department may consider factors including, but not limited to the following:

(a) The eligibility of the Applicant;

(b) Factors identified above in Subparagraph (6);

(c) The feasibility of the proposed Project;

(d) The likelihood and timeliness of loan repayment;

(e) Cooperation with and the results of any loan due diligence, including credit checks and appraisals;

(f) The willingness to provide, and the value of, any loan Collateral; and

(g) The availability of Funds.

(8) Upon completion of its review the Department may, in whole or in part, approve or deny the application. The Department will provide the Applicant notice of its determination at the address identified in the application. Notwithstanding anything stated in an application approval, any application approval is subject to the Applicant or Small Business successfully passing, to the Department’s satisfaction, such credit checks and other due diligence as the Department may require or perform. Furthermore, and notwithstanding anything stated in an application approval, any application approval also is subject to the Applicant and Small Business (together with such guarantors as may be required by the Department) executing, recording and delivering such documents and instruments as the Department may require.

Stat. Auth.: 2008 OL Ch. 18 & ORS 406.005
Stats. Implemented: 2008 OL Ch. 18
Hist.: DVA 6-2008, f. 9-30-08, cert. ef. 10-1-08

274-013-0040

Loan Conditions

(1) Before providing a Program loan, the Department may require or perform such further credit checks and other due diligence as it deems appropriate. The Applicant and proposed Borrower must cooperate to the Department’s satisfaction with respect to such credit checks and other due diligence.

(2) The Department may require that the Borrower and others execute, record and deliver such documents, including such representations, covenants and warranties, as the Department deems appropriate. The Borrower must cooperate fully with such document requirements.

(3) The Department may require such Collateral requirements as it deems appropriate. The Borrower and others shall provide such assurances of Collateral as the Department may require.

(4) The Department may require the payment of a loan fee of not more than one and one-half percent of the amount of the loan to recompense the Department for its costs of loan administration.

(5) Notwithstanding any Program loan commitments by the Department, all Program loans are subject to the availability of Funds as reasonably determined by the Department.

(6) The initial amount of any Program loan shall not exceed $20,000. The total amount of Funds loaned to any Applicant or Borrower shall not exceed $40,000.

(7) The Department may, in its reasonable discretion, disburse the proceeds of an approved loan in such amounts and at such times as the Department deems appropriate to ensure that loan proceeds are used for Project purposes and to preserve the integrity of the Fund. If the Department determines that the financial condition of the Borrower has deteriorated, the Department may suspend or terminate further Program loan disbursements. The Department also may exercise any other remedy available to it in law, contract or otherwise.

(8) The Borrower must abide by all laws and regulations applicable to the Project and provide evidence satisfactory to the Department of its receipt of all applicable federal, state and local permits and licenses before the Department will make any disbursement of Program loan Funds. The Borrower also shall fully and timely perform all Program loan obligations, including as provided in any Program loan documents. The Department may suspend, terminate or exercise any other remedy with respect to its Program loan upon a determination by the Department of any default or other failure of performance by the Borrower, including but not limited to any failure of timely completion of the Project, misallocation of Program loan funds or failure to make timely Program loan repayments.

(9) The Department may take such action as it deems appropriate in the review and enforcement of a Project or of a Program loan, including but not limited to entry onto Project property, inspection of a Project and review and copying of any Borrower documents with respect to a Project. The Borrower shall cooperate fully with the Department in such review and enforcement efforts and agrees to allow Project inspection and review and copying of Project documents as the Department deems appropriate.

(10) At the request of the Department, the Borrower will provide to the Department annual financial statements; copies of tax returns and other requested documents. The Department may require additional financial information or more frequent financial statements.

Stat. Auth.: 2008 OL Ch. 18 & ORS 406.005
Stats. Implemented: 2008 OL Ch. 18
Hist.: DVA 6-2008, f. 9-30-08, cert. ef. 10-1-08

274-013-0050

Loan Documents

(1) Program loan documents may contain such provisions as the Department deems appropriate, including but not limited to terms with respect to Program loan disbursements, Collateral, repayment, remedies, late fees and interest, collection charges, attorneys fees and costs and post-judgment interest.

(2) The Department may charge Borrowers for appropriate administrative costs, collection fees, late fees and attorney fees, as well as interest charges on the foregoing, and post-judgment interest.

Stat. Auth.: 2008 OL Ch. 18 & ORS 406.005
Stats. Implemented: 2008 OL Ch. 18
Hist.: DVA 6-2008, f. 9-30-08, cert. ef. 10-1-08

274-013-0060

Administrative Review

(1) Any Person adversely affected by a Department determination with respect to this Program, unless controlled by relevant loan documents, may request review of such determination by the Department's Director. The Director, or the Director’s designee, will undertake such review as he or she deems appropriate. The Director, or the Director's designee will endeavor to provide a written response within 30 days of receipt of the requested review.

(2) Any request for modification of any provision with respect to a Program loan must be made in writing to the Department. No Program loan modification or waiver of any term shall be effective unless in a signed writing by the Director.

(3) If the Director consents to any requested modification, the Department may require the Borrower to pay for related costs, including but not limited to all costs of modifying or amending any loan documents, filings, recordings or financing statements.

Stat. Auth.: 2008 OL Ch. 18 & ORS 406.005
Stats. Implemented: 2008 OL Ch. 18
Hist.: DVA 6-2008, f. 9-30-08, cert. ef. 10-1-08

274-013-0070

Waiver of Rules

The Department may waive or modify any requirements of OAR 274, division 013, in order to achieve substantial justice and the purposes of the Program unless such waiver or modification would violate applicable federal or state law.

Stat. Auth.: 2008 OL Ch. 18 & ORS 406.005
Stats. Implemented: 2008 OL Ch. 18
Hist.: DVA 6-2008, f. 9-30-08, cert. ef. 10-1-08

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