Oregon Business Development Department
Chapter 123
Division 92
Small Business Expansion Loan Fund (Oregon Royalty Fund)
123-092-0060
Loan Conditions of the Oregon Royalty Loan Program
The Department may approve a loan request if it finds that:
(1) The proposed Business Development Project is feasible and a reasonable risk from practical and economic standpoints, the Applicant demonstrates readiness for market, and the loan has a reasonable prospect of repayment.
(2) The applicant can provide good and sufficient collateral for the loan and personal and/or corporate guarantees, or a combination of the preceding items, that are adequate relative to the risks and potential returns, and the applicant's financial resources are adequate to ensure success of the project, all as determined by the Department at its sole discretion. Collateral value will be determined at the sole discretion of the Department. A lack of sufficient collateral or a lack of guarantor support may result in a higher return requirement to offset the higher risk associated with either not having sufficient collateral and or guarantor support.
(3) The Applicant demonstrates to the Department’s satisfaction a reasonable potential for strong gross profit margin and rapid sales growth that may support economic diversification in the state or the region in which the business is conducted, increase employment opportunities or retain existing jobs in the state or region, or increase the competitiveness of the Applicant’s business in the Traded Sector.
(4) While an ORL may fund up to 100% of the Business Development Project, preference may be given to Business Development Projects that include funding sources other than the ORL.
(5) Any loans approved by the Department utilizing SSBCI Funds must demonstrate a minimum 1:1 match of private equity raised as a result of the ORL for the project. Utilization of SSBCI Funds in a project to fund a loan are made at the sole discretion of the Department and all loans greater than $250,000 will be required to use SSBCI Funds unless otherwise waived by the Department.
(6) Monies in the Fund are or will be available for the proposed business development project.
(7) The applicant and Qualified Business must be in compliance with, and remain compliant with all local, state and federal laws and regulations.
(8) The applicant, borrower, guarantors and principal owners are current on all obligations to the State of Oregon.
(9) The applicant can show the ability to repay an amount typically up to 2X of the loan amount over a three (3) to five (5) year period.
(10) The applicant can demonstrate existing reoccurring sales to repay the loan.
Statutory/Other Authority: ORS 285B.092, ORS 285A.060, ORS 285A.070 & ORS 285B.130 & ORS 285B.133
Statutes/Other Implemented: ORS 285B.092, ORS 285A.060, ORS 285A.070 & ORS 285B.130 & ORS 285B.133
History:
OBDD 25-2023, amend filed 10/04/2023, effective 10/04/2023
OBDD 6-2023, temporary amend filed 04/12/2023, effective 04/12/2023 through 10/08/2023
OBDD 13-2019, amend filed 09/04/2019, effective 09/04/2019
OBDD 2-2019, adopt filed 01/07/2019, effective 01/07/2019