(a) Loans may be guaranteed when:
(1) The Arkansas Development Finance Authority deems the utilization of a loan guaranty in the best interest of the economic development of the State of Arkansas;
(2) The amount in the Small Business Revolving Loan Fund, excluding the unpaid portion of any direct loan made from the fund in accordance with subsection (b) of this section, is sufficient to pay current calendar debt service requirements on all guaranteed loans currently outstanding plus the loan to be guaranteed;
(3) The small-business person is found to be financially responsible and demonstrates that sufficient income may reasonably be expected to be available to pay as they come due the amortization payments of the loan and all normal operating expenses of the business; and
(4)
(A) A financial institution agrees to participate in the financing package necessary to accomplish the project.
(B) Participation may range from ten percent (10%) to fifty percent (50%) depending upon the project and the requirement for funding.
(b) A direct loan may be made by the authority from the fund when:
(1) The authority deems the making of a direct loan to be in the best interest of the economic development of the State of Arkansas;
(2) The small-business person is found to be financially responsible and demonstrates that sufficient income may be reasonably expected to be available to pay as they come due the amortization payments on the loan and the normal operating expenses of the business; and
(3) The assets remaining in the fund, excluding the unpaid portion of any direct loan held by the fund, shall not be reduced by the making of the loan to an amount less than is required by subdivision (a)(2) of this section for all then-outstanding guaranteed loans.
(c) In all events, the authority shall not make direct loans to small business persons which, in the aggregate, exceed at any one (1) time thirty percent (30%) of the total assets, including the unpaid portion of all direct loans made from the fund, of the fund.
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