234.84 Job training loan guarantee program.

(1) Definition. In this section, “corporation" means the Wisconsin Economic Development Corporation.

(2) Guarantee requirements. The authority may use money from the Wisconsin job training reserve fund to guarantee a loan under this section if, at the time application is made for the loan, all of the following apply:

(a) The borrower is an employer in this state, regardless of the number of employees.

(b) The loan qualifies as an eligible loan under sub. (3).

(c) The lender is a financial institution that enters into an agreement under s. 234.932 (3) (a).

(3) Eligible loans. A loan is eligible for guarantee of collection from the Wisconsin job training reserve fund under s. 234.932 if all of the following apply:

(a) The borrower certifies that it will use the loan proceeds for expenses related to employee training or retraining or for purchasing equipment or upgrading facilities for purposes related to employee training or retraining.

(b) The borrower certifies that loan proceeds will not be used to refinance existing debt or for operating or entertainment expenses.

(c) The interest rate on the loan, including any origination fees or other charges, is approved by the corporation.

(d) The original loan term does not extend beyond 3 years if the loan proceeds are used exclusively for expenses related to instruction or training, or beyond 5 years if the loan proceeds are used for purchasing equipment or upgrading facilities that will be used for instructing or training employees.

(e) The total outstanding principal amount of all loans to the borrower that are guaranteed under this section does not exceed $250,000.

(f) The lender obtains a security interest in the physical plant, equipment or other assets if the loan proceeds are to be used for purchasing equipment or upgrading facilities that will be used for instructing or training employees.

(g) The lender confirms that the borrower satisfies all applicable loan underwriting criteria.

(4) Guarantee of collection.

(a) Subject to par. (b), the authority shall guarantee collection of a percentage of the principal of, and all interest and any other amounts outstanding on, any loan eligible for a guarantee under sub. (2). The corporation shall establish the percentage of the principal of an eligible loan that will be guaranteed, using the procedures described in the agreement under s. 234.932 (3) (a). The corporation may establish a single percentage for all guaranteed loans or establish different percentages for eligible loans on an individual basis.

(b) Except as provided in s. 234.932 (4), the total outstanding guaranteed principal amount of all loans that the authority may guarantee under par. (a) may not exceed $8,000,000.

(5) Administration.

(a) The program under this section shall be administered by the corporation with the cooperation of the authority. The corporation shall enter into a memorandum of understanding with the authority setting forth the respective responsibilities of the corporation and the authority with regard to the administration of the program, including the functions and responsibilities specified in s. 234.932. The memorandum of understanding shall provide for reimbursement to the corporation by the authority for costs incurred by the corporation in the administration of the program.

(b) The corporation may charge a premium, fee, or other charge to a borrower of a guaranteed loan under this section for the administration of the loan guarantee.

History: 1995 a. 27 s. 9116 (5); 1995 a. 116; 2011 a. 32.