WILLIAM DONALD SCHAEFER, Governor                         Ch. 597

Article - Financial Institutions

13-233.2.

(a) The Authority may utilize the Guaranty Fund to guarantee up to 80 percent of
the principal of and interest on a long-term loan made by a financial institution to an
applicant only if:

(1)     The applicant meets the requirements of § 13-231 and has not violated
any provisions of § 13-233.4 of this subtitle;

(2)     The loan amount is not less than $5,000 and the maximum amount
payable by the Authority under its guarantee does not exceed $600,000;

(3)      [The loan is to be used by the applicant for] THE PURPOSES FOR
WHICH THE LOAN IS TO BE USED INCLUDES INCLUDE:

(i) Working capital;

(ii) The acquisition and related installation of machinery or
equipment; [or]

(iii) Necessary improvements to real property LEASED OR owned in
fee simple by the applicant[, but in no case shall the portion of the loan used for
improvements to real property exceed one-half of the entire loan amount]; OR

(IV) THE ACQUISITION OF REAL PROPERTY TO BE OWNED IN FEE
SIMPLE BY THE APPLICANT IF:

1. THE REAL PROPERTY IS TO BE USED IN THE OPERATION
OF THE APPLICANT'S TRADE OR BUSINESS FOR WHICH THE LOAN AND GUARANTEE
ARE SOUGHT; AND

2. A LIEN IS PLACED ON THE REAL PROPERTY BY THE
FINANCIAL INSTITUTION OR THE AUTHORITY;

(4)     The loan shall mature in not more than 10 years from the date of closing
of the loan; and

(5)     The rate of interest on the loan is no greater than the rate of interest
determined by the Authority to be the monthly weighted average of the prime lending
rate, plus 2 percent, prevailing from time to time in the City of Baltimore on unsecured
commercial loans.

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
October 1, 1994.

Approved May 26, 1994.

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