A PFI may request to enroll a Qualified Loan under the Program
if the PFI determines the Qualified Loan:
(1) is for an amount equal to or between $5,000 and
$20,000,000;
(2) is provided to a Borrower who is not an executive
officer, director, or Principal of the Lender, or person with comparable
official capacity with or significant ownership in the PFI, or a member
of the immediate family of such a person;
(3) is not for a business enterprise in which a person
described in paragraph (2) of this section has a shared ownership,
investment, or other significant pecuniary interest; and
(4) is being provided to a Borrower that is a Small
Business that:
(A) is not engaged in speculative activities that develop
profits from fluctuations in price rather than through the normal
course of trade unless those activities are incidental to the regular
activities of the business and are part of a legitimate risk management
strategy to guard against price fluctuations related to the regular
activities of the business;
(B) does not earn more than half of its annual net
revenue from lending activities unless the Borrower is a Community
Development Financial Institution that is not a depository institution
or a bank holding company or a tribal enterprise lender that is not
a depository institution or a bank holding company;
(C) is not engaged in pyramid sales, where a participant's
primary incentive is based on the sales made by an ever-increasing
number of participants;
(D) is not engaged in activities that are prohibited
by state law, federal law, or other applicable laws in the jurisdiction
where the business is located or conducted;
(E) at the time of loan obligation, is not delinquent
in any taxes owed the State of Texas, and is in good standing with
the Comptroller of Public Accounts; and
(F) does not derive any of its gross annual revenue
from gambling activities.
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