ROBERT L. EHRLICH, JR., Governor                              S.B. 51

Senate Bill No. 51

AN ACT concerning

Business and Economic Development - Maryland Small Business
Development Financing Authority - Guaranty Fund

FOR the purpose of authorizing the Maryland Small Business Development
Financing Authority to utilize its Guaranty Fund to guarantee up to a certain
amount the principal and interest of certain loans used to refinance existing
debt; and generally relating to the use of the Guaranty Fund of the Maryland
Small Business Development Financing Authority to guarantee loans.

BY repealing and reenacting, with amendments,

Article 83A - Department of Business and Economic Development

Section 5-1029

Annotated Code of Maryland

(1998 Replacement Volume and 2002 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article 83A - Department of Business and Economic Development

5-1029.

(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 § 5-1025 and has not
violated any provisions of § 5-1031 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 $1,000,000;

(3)     The purposes for which the loan is to be used include:
(i) Working capital;

(II) REFINANCING EXISTING DEBT OF THE APPLICANT;

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

[(iii)](IV) Necessary improvements to real property leased or owned
in fee simple by the applicant; or

[(iv)] (V) 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

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