Maryland Code, Economic Development § 5-525
Current as of December 31, 2021 | Updated by FindLaw Staff
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(a)(1) The Authority may use the Fund to guarantee a loan made to an applicant only if:
(i) the applicant meets the requirements of this part;
(ii) the loan is to be used to perform a contract for which the majority of the funding is provided by the federal government, a state government, a local government, or a utility regulated by the Public Service Commission;
(iii) the maximum amount payable by the Authority under the guaranty does not exceed $2,000,000; and
(iv) the guaranteed loan is to be used for:
1. working capital; or
2. equipment needed to perform the contract, the cost of which can be repaid from contract proceeds, if the Authority has entered into an agreement with the applicant to secure the loan or guaranty.
(2) A guaranty made by the Authority may not exceed the term of the contract, unless the Authority determines that a longer term better serves the purposes of this subtitle.
(b)(1) The Authority may use the Fund to guarantee a person's proposed equity investment in the applicant only if:
(i) the applicant meets the requirements of this part;
(ii) the amount of the equity investment to be guaranteed does not exceed the lesser of:
1. 10% of the person's equity investment in the applicant; or
2. $250,000;
(iii) the equity investment to be guaranteed is to be used to perform a contract for which the majority of funding is provided by the federal government, a state government, a local government, or a utility regulated by the Public Service Commission; and
(iv) the equity investment to be guaranteed is to be used for:
1. working capital; or
2. equipment needed to perform the contract, the cost of which can be repaid from contract proceeds, if the Authority has entered into an agreement with the applicant to secure the guaranty.
(2) The Authority may not guarantee the equity investment of a person who:
(i) previously held an equity investment in the applicant;
(ii) previously participated in the management of the applicant; or
(iii) in any other manner is related to:
1. the applicant; or
2. any of the current stockholders, officers, or management personnel of the applicant.
(c)(1) The Authority may use the Fund to lend money to an applicant only if:
(i) the applicant meets the requirements of this part;
(ii) the applicant is unable to obtain money on reasonable terms through normal lending channels from another source;
(iii) the loan does not exceed $2,000,000;
(iv) the loan is to be used to perform a contract for which the majority of funding is provided by the federal government, a state government, a local government, or a utility regulated by the Public Service Commission; and
(v) the loan is to be used for:
1. working capital; or
2. equipment needed to perform the contract, if the contract proceeds can repay the cost of the equipment and if the Authority has entered into an agreement with the applicant to secure the loan.
(2) A loan that the Authority makes shall mature not later than the term of the contract, unless the Authority finds that a longer term better serves the purposes of this part.
(d) In providing financial assistance under this section, the Authority shall recognize the need to serve applicants from all political subdivisions in the State.
Cite this article: FindLaw.com - Maryland Code, Economic Development § 5-525 - last updated December 31, 2021 | https://codes.findlaw.com/md/economic-development/md-code-econ-dev-sect-5-525.html
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