SUBCHAPTER 01N – The Hurricane Recovery Act of 2005
Business REcovery Programs
SECTION .0100 - GENERAL INFORMATION
04 NCAC 01N .0101 SCOPE
(a) The Department of Commerce shall operate a program of
assistance to businesses in order to protect jobs in designated
disaster-damaged counties of North Carolina.
(b) The Department of Commerce shall make interest rebates
available to business owners who received a disaster business loan from the
U.S. Small Business Administration (SBA) for physical damage or economic injury
to their business sustained as a result of the hurricanes of 2004.
(c) The Department of Commerce shall make direct loans
available to businesses for both physical damage and economic injury suffered
as a result of the hurricanes of 2004.
(d) The applicant business must be located in one of the
counties covered by Session Law 2005-1, more commonly known as the Hurricane
Recovery Act of 2005.
(e) The Small Business and Technology Development Center
(the SBTDC) shall accept applications for interest rebates and business loans
until July 30, 2005.
(f) Loan applicants must submit completed applications to
the SBTDC at Business Recovery Assistance Centers (BRACs) by the final deadline
to be eligible for this program.
(g) BRACs are located at all of the regional offices of the
SBTDC.
History Note: Authority G.S. 143B-430(c); 143B-431(a)(1);
S.L. 2005-1;
Emergency Adoption Eff. April 25, 2005;
Temporary Adoption Eff. July 29, 2005;
Eff. January 1, 2006.
04 NCAC 01N .0102 ELIGIBILITY
(a) In order to be eligible for an interest rebate or
direct loan, a business must have suffered damage, either physical loss or
economic injury from the hurricanes of 2004. The damage must be quantifiable
and verifiable as to its cause.
(b) In order to receive an interest rebate, the business
must show evidence of having received a disaster business loan from the SBA for
physical damage or economic injury to the business sustained as a result of the
hurricanes of 2004, and evidence of disbursal of funds thereunder.
(c) In order to receive a loan, the business must have been
a going concern as of the date of the hurricane and as of the date of its
application for assistance. The business shall submit proof of having been a
going concern prior to the hurricane, and at the time of application, such as a
valid business license, a business plan, and a commercial property lease. The
business must also demonstrate the potential to recover from the disaster and
remain a going concern with the infusion of the proposed loan funds.
History Note: Authority G.S. 143B-430(c);
143B-431(a)(1); S.L. 2005-1;
Emergency Adoption Eff. April 25, 2005;
Temporary Adoption Eff. July 29, 2005;
Eff. January 1, 2006.
04 NCAC 01N .0103 BENEFITS UNDER THE INTEREST REBATE
PROGRAM
The interest rebate program shall offer rebates equal to the
interest payments projected to be made by the successful SBA business borrower
for the first three years on the finalized SBA disaster business loan for
damage sustained as a result of the hurricanes of 2004.
History Note: Authority G.S. 143B-430(c);
143B-431(a)(1); S.L. 2005-1;
Emergency Adoption Eff. April 25, 2005;
Temporary Adoption Eff. July 29, 2005;
Eff. January 1, 2006.
04 NCAC 01N .0104 BENEFITS UNDER The Business REcovery
Loan Program
(a) A loan shall be for a period of eight years. All
payments shall be deferred for the first three years and the loan shall accrue
no interest during that period. During the final five-year period, interest
shall accrue at three percent and principal shall be amortized through regular
monthly payments of principal and interest. There shall be no penalty for
early repayment.
(b) Maximum funding under this program shall be one hundred
thousand dollars. The minimum loan amount shall be five thousand dollars.
Regardless of the maximum funding for which the business might otherwise
qualify, funding shall not exceed the actual physical damage and economic
injury sustained by the business from the hurricane(s).
(c) The Secretary of Commerce or his delegee may approve
exceptions to these minimum and maximum loan amounts after determining that a
compelling economic need would be served, such as preservation of jobs and
investment in the disaster affected counties. Collateral shall be required in
the case of exceptions to the specified maximum loan amount.
(d) Payments for economic losses shall be limited to
documented business expenses necessary for the continued operation of the business.
History Note: Authority G.S. 143B-430(c);
143B-431(a)(1); S.L. 2005-1;
Emergency Adoption Eff. April 25, 2005;
Temporary Adoption Eff. July 29, 2005;
Eff. January 1, 2006.
04 NCAC 01N .0105 PROCEDURES FOR INTEREST REBATE FOR SBA
BORROWERS
(a) Applicants shall apply for interest rebates through the
BRAC administered by the SBTDC in cooperation with the Department of Commerce.
(b) The borrower shall present to the BRAC counselor a copy
of his SBA Loan Authorization and Agreement, a copy of his most recent
disbursement letter showing the outstanding balance of the loan, and a signed
application for the interest rebate.
(c) The BRAC counselor shall perform a mathematical calculation
to estimate the interest to be paid by the borrower over the ensuing three
years.
(d) The borrower shall affirm that he is entitled to this
interest rebate, that the information provided to the SBA and the SBTDC is true
and correct to the best of his knowledge and that the rebate shall not be used
to duplicate any benefits received under any Federal program.
(e) Upon completion of the request and supporting
documents, the BRAC counselor shall forward the application to the SBTDC
central office for processing. The SBTDC shall transmit approved requests for
payment to the bank that shall disburse the loans.
(f) The disbursing bank shall review the documents for
completeness, and shall deliver a check in the amount that has been approved,
to the borrower.
(g) The bank shall send a notice with the rebate check
informing the recipient that rebate proceeds are subject to Federal duplication
of benefits limitations and that the State of North Carolina shall inform the
SBA that the borrower has received the rebate.
History Note: Authority G.S. 143B-430(c);
143B-431(a)(1); S.L. 2005-1;
Emergency Adoption Eff. April 25, 2005;
Temporary Adoption Eff. July 29, 2005;
Eff. January 1, 2006.
04 NCAC 01N .0106 PROCEDURES FOR The Business Recovery
Loan Program
(a) Applicants shall apply for loans through the BRAC
administered by the SBTDC in cooperation with the Department of Commerce.
(b) The SBTDC shall work with applicants to assist them in
preparing the needed documentation to apply for a disaster assistance loan.
(c) Loan applications shall be accepted at all of the
regional offices maintained by the SBTDC across North Carolina.
(d) Applicants must meet the eligibility requirements set
forth in Paragraphs 04 NCAC 01N .0102(a) and (c), must show cash flow coverage
of at least 80 percent, must agree to quarterly business counseling, must
document losses that resulted from the hurricane(s) by providing SBA loss
verification forms or insurance adjuster forms and photographs, as applicable,
must provide such other documents as are requested by the SBTDC for evaluation
of the application, and must provide loan guarantees from parties that own
more than 20 percent of the applicant. The SBTDC shall consider an applicant's
responsible credit history evidenced by credit reports showing repayment on
previous loans.
(e) Upon receipt of a completed application, a loan
decision shall be made by the senior management team of the SBTDC within three
business days. If approved, the decision shall be transmitted to the
disbursing bank. The bank shall disburse the loan after the bank receives the
properly executed note and loan package.
(f) Should the SBA approve a loan upon reconsideration, the
borrower shall repay the principal amount of the loan provided by the State of
North Carolina pursuant to the rules in this Subchapter.
History Note: Authority G.S. 143B-430(c);
143B-431(a)(1); S.L. 2005-1;
Emergency Adoption Eff. April 25, 2005;
Temporary Adoption Eff. July 29, 2005;
Eff. January 1, 2006.
04 NCAC 01N .0107 APPEAL
An applicant may appeal a funding decision under this
Subchapter to the Office of the Assistant Secretary for Business Development
and Trade, NC Department of Commerce. The Assistant Secretary shall convene a
three-person committee to include himself, the Director of the Commerce Finance
Division and the Director of Business Retention and Expansion. Upon a full and
complete review of the facts in each case, the committee shall make a
recommendation to the Secretary of Commerce, who shall issue a decision.
History Note: Authority G.S. 143B-430(c);
143B-431(a)(1); S.L. 2005-1;
Emergency Adoption Eff. April 25, 2005;
Temporary Adoption Eff. July 29, 2005;
Eff. January 1, 2006.
