Section: Notice of noninsurance of deposits
5. a. The department shall use the moneys in the program as established and for the purposes designated pursuant to section 4 of P.L.1999, c.239 (C.52:27D-446).
b. In determining the criteria for making grants to the certified corporations or the Statewide organization, the department shall, in addition to applying customary underwriting criteria, also consider:
(1) the plan and scope of business training and technical assistance to be provided to qualified recipients;
(2) the plan and scope of other services to be provided to qualified recipients;
(3) geographic representation among the regions chosen, pursuant to subsection b. of section 4 of P.L.1999, c.239 (C.52:27D-446);
(4) the ability of the certified corporation or the Statewide organization, with its plan, to monitor and provide financial oversight of recipients of loans, to administer a revolving loan fund, and to investigate and qualify financing proposals and to service credit accounts;
(5) the sources and the sufficiency of operating funds, other than those provided herein, for the certified corporation or the Statewide organization; and
(6) the intent of the certified corporation or the Statewide organization, as set forth in its plan and written indications of local institutional support, to provide services to qualified recipients in the region within which it is located.
c. Loan funds may be used by a certified corporation or the Statewide organization to:
(1) satisfy matching requirements for other State, federal, or private funding only if funding is intended and used for the purpose of providing or enhancing the certified corporation's or Statewide organization's ability to provide and administer loans, technical assistance, or business training to qualified recipients;
(2) establish a revolving loan fund from which the certified corporation or the Statewide organization may issue loans to qualified recipients, provided that a single loan amount, as part of a loan agreement, does not exceed $5,000, or issue additional loans to qualified recipients which have completed payments on an earlier loan, under terms and conditions of the certified corporation or the Statewide organization; or
(3) carry out the purposes of the provisions as provided in both paragraphs (1) and (2) of this subsection.
d. Loan funds created by a certified corporation or a Statewide organization shall not be:
(1) loaned for relending or investment in stocks, bonds, or other securities or for property not intended for use in production by the recipient of the loan; or
(2) used to refinance a nonperforming loan held by a financial institution or to pay the operating costs of a certified corporation or a Statewide organization; however, interest income earned from the proceeds of a loan may be used to pay operating expenses.
e. Certified corporations or the Statewide organization are required to contribute cash from other sources to leverage and secure loans from the program. Contributions provided by the certified corporation or a Statewide organization must be in a ratio of at least $1 from other sources for each $3 in loans from the program and at least $1 from other sources for each $4 for training, technical assistance and administrative expenses from the program. These contributions may come from a public or private source other than the program and may be in the form of loans or grants.
f. Loans made by a certified corporation or a Statewide organization to a qualified recipient shall be made pursuant to a loan agreement and may be amortization or term loans, bear interest at less than the market rate, be renewable, and contain other terms and conditions considered appropriate by the department that are consistent with the purposes of P.L.1999, c.239 (C.52:27D-443 et seq.) and with rules and regulations promulgated by the department to implement P.L.1999, c.239.
g. (1) Unless subject to federal law, rule or regulation, each certified corporation or the Statewide organization that receives a grant under P.L.1999, c.239 (C.52:27D-443 et seq.) shall undergo an audit, at its own expense, at least once every two years. The certified corporation or a Statewide organization shall submit a copy of the audit to the department.
(2) If an audit is performed under a requirement of federal law, rule or regulation, the department shall waive the audit required in this subsection with respect to all issues addressed by the federal audit report. However, the department may require an audit of matters that are not, in the department's judgment, addressed by the federal report including, but not limited to, verification of compliance with requirements specific to the program, such as job-generation standards and reporting.
h. The department may use up to five percent of the funds received from the General Fund for the purposes of implementing the program, as pursuant to P.L.1999, c.239 (C.52:27D-443 et seq.), for administrative costs.
L.1999,c.239,s.5; amended 2004, c.176, s.5.
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