Common use of SSBCI PROGRAM REQUIREMENTS Clause in Contracts

SSBCI PROGRAM REQUIREMENTS. VSBFA and the Lender acknowledge that the Program will be funded, in whole or in part, by State Small Business Credit Initiative Program funds, as available, and as such, both VSBFA and the Lender agree that the use of funds pursuant to this Agreement shall be governed by, and not be in derogation of, any rules, regulations, or guidelines for the Program promulgated or issued by the US Treasury or the Commonwealth of Virginia. As to each Loan in which VSBFA provides collateral support, the Lender agrees that it will have determined to the best of its knowledge and belief that all of the following are true and correct: a) The proceeds of the Loan will not be used: i. Eliminate the bank’s requirement for collateral or the principal’s personal guaranty, or ii. Finance passive real estate investment, purchase of residential housing, real estate construction or development, or iii. Refinance a Lender’s existing debt, except that if there is additional debt added to the refinance amount, the additional principal is eligible for CCP, or iv. Repay delinquent federal or state income taxes unless the Borrower has a payment plan in place with the relevant taxing authority; or repay taxes held in trust or escrow, e.g. payroll or sales taxes; or v. Reimburse funds owed to any owner, including any equity injection or injection of capital for the business’ continuance; or vi. To purchase any portion of the ownership interest in the Borrower; or to purchase any portion of the ownership interest in any company, including 100% interest; or vii. To purchase goodwill, or viii. To finance the unguaranteed portion of SBA-guaranteed loans or other federally guaranteed loans, or ix. To provide financing to a religious establishment unless the proceeds of the loan are used only for a “business purpose.” A “business purpose” does not include an explicitly religious purpose, and the proceeds of the loan to a religious establishment may not be used for the purposes of supporting, assisting, or furthering an explicitly religious purpose, including, but not limited to, worship, religious instruction, or proselytization. b) No principal of the Borrower or the Lender has been convicted of a sex offense against a minor (as such terms are defined in Section 111 of the Sex Offender Registration and Notification Act (42 U.S.C. § 16911)); c) The Lender is in material compliance with all federal and state laws, rules, and regulations pertaining to the making of loans (including 31 C.F.R. § 103.121)