C.R.S. Section 24-36-205
Small business recovery loan program

  • creation
  • requirements
  • oversight

(1)

Intentionally left blank —Ed.

(a)

The state treasurer is authorized to enter into a contract or contracts to establish a small business recovery loan program in accordance with this part 2.

(b)

The purpose of the loan program is to support the state’s recovery from the economic crisis caused by COVID-19 through leveraging private investment to support Colorado small businesses recovering from the crisis caused by COVID-19 by making loans, acquiring participation interest in loans, leveraging private small business lending through the Colorado credit reserve program, or other activities that accomplish the same purpose. The loan program shall only make loans directly if federal or state bank regulators prohibit the banking industry from originating loans for the loan program.

(2)

The state treasurer may contract with the Colorado housing and finance authority created in part 7 of article 4 of title 29 or with a bank, nonprofit organization, nondepository community development financial institution, business development corporation, certified public accountant firm, or fund manager to administer a loan program. If the state treasurer contracts with an entity other than the Colorado housing and finance authority to administer a loan program, the state treasurer shall use an open and competitive process to select the entity. The state treasurer shall consult with the director of the office of economic development and the oversight board in selecting and contracting with a loan program manager.

(3)

Intentionally left blank —Ed.

(a)

Notwithstanding any restriction on the investment of state money set forth in section 24-36-113 or in any other provision of law, subject to the availability of money in the small business recovery fund and the requirements of this part 2:

(I)

In fiscal year 2020-21, the state treasurer may provide up to thirty million dollars in first loss capital to a loan program or programs or to the Colorado credit reserve from the small business recovery fund; and

(II)

Subject to the limitations in subsection (3)(b) of this section, in fiscal years 2021-22, 2022-23, and 2023-24, the state treasurer may provide up to a total of forty million dollars in first loss capital to a loan program or programs or to the Colorado credit reserve from the small business recovery fund.

(b)

The money provided under this subsection (3) must be provided in tranches of ten million dollars or less, up to a maximum amount of fifty million dollars in all tranches combined across fiscal years 2020-21 through 2023-24. The state treasurer shall not provide a tranche to a loan program or to the Colorado credit reserve until at least ninety percent of the money in any prior tranche has been invested in small business loans in accordance with subsection (4) of this section, as determined by the oversight board and certified by the loan program manager. Money provided to the Colorado credit reserve is considered invested in small business loans for the purposes of this subsection (3)(b) once it is paid to the Colorado housing and finance authority.

(4)

Any contract for the administration of a loan program must include the following terms in order to receive money provided by the state treasurer pursuant to subsection (3) of this section:

(a)

Except for money contributed to the Colorado credit reserve, the money provided by the state treasurer in a single tranche shall not be committed pursuant to a contract relating to a loan program until money is committed pursuant to a contract relating to a loan program from other sources at a ratio of at least four dollars from other sources for each one dollar provided by the state. If a loan program manager does not secure sufficient investments from other sources to meet this requirement within the time allowed by a contract, the money provided by the state shall be returned to the small business recovery fund.

(b)

Except for money contributed to the Colorado credit reserve, once the money in a tranche is matched in accordance with subsection (4)(a) of this section, it must be used to make loans or purchase participation interest in loans for working capital, including the purchase of equipment, to eligible borrowers, or other activities that accomplish the same purpose. The oversight board shall consult with lending industry leaders and representatives of small businesses with regard to subsections (4)(b)(I) to (4)(b)(VI) of this section. Each loan must be subject to the following terms:

(I)

The loan must be in an amount of at least ten thousand dollars but not more than five hundred thousand dollars, as determined by the oversight board;

(II)

The loan must have a maximum initial maturity of up to ten years, based on the need of the eligible borrower, with no penalty for prepayment, as determined by the oversight board. The originating lender may extend the term for purposes of restructuring the loan.

(III)

The principal must be amortized over the term of the loan or a longer period, as determined by the oversight board;

(IV)

Principal and interest payments may be deferred for up to one year, as determined by the oversight board, with the unpaid interest being capitalized. Deferrals must be limited to circumstances of hardship created by the COVID-19 pandemic.

(V)

The loan must carry an interest rate that is lower than would otherwise be available on a risk-adjusted basis from a commercial lender or that bears terms that are not otherwise available from a commercial lender, as determined by the oversight board; and

(VI)

The eligible borrower may provide a personal guarantee, collateral, or other security as determined by the oversight board, which may be subordinate to existing debt.

(c)

Intentionally left blank —Ed.

(I)

In order to ensure geographic equity, each tranche of loan funding must be subject to an initial period of time in which a portion of the money is allocated to each county on a basis proportional to the county’s share of small businesses relative to the state, the county’s share of small business employees relative to the state, the county’s share of small business personal property relative to the state, or other similar metrics as determined by the oversight board, or based on a formula established under subsection (4)(c)(IV) of this section. The money allocated to each county must be reserved for applications from eligible borrowers located in that county for the initial period of time. For the purposes of this subsection (4)(c), an eligible borrower is considered to be located in the county in which it has its principal place of business, as reflected in its most recent filing with the secretary of state or subject to such other documentation as the oversight board establishes. The oversight board shall determine the amount of time in which the money in each tranche is subject to a geographic restriction under this subsection (4)(c)(I).

(II)

Once the time period established by the oversight board under subsection (4)(c)(I) of this section has passed, all money remaining in the tranche is available to eligible borrowers on a statewide basis.

(III)

For money contributed to the Colorado credit reserve, the oversight board may waive the requirements of this subsection (4)(c) or establish alternative geographic distribution requirements or targets.

(IV)

For any tranche of loan funding, the oversight board may, in its discretion, establish an alternative formula for the allocation of funds to counties for purposes of subsection (4)(c)(I) of this section that accounts for how affected each county has been by the COVID-19 pandemic and its impacts.

(d)

Intentionally left blank —Ed.

(I)

A loan program manager shall make every effort to achieve benchmarks published by the oversight board pursuant to section 24-36-204 (8)(d) for the percentage of loans supported by the program that are made to businesses owned by socially and economically disadvantaged individuals, including businesses owned by women, minorities, and veterans and to businesses located in rural counties. A loan program manager shall consult with the minority business office within the office of the governor and the division of business funding and incentives within the office of economic development to develop an outreach strategy for marketing the loan program to businesses owned by women, minorities, and veterans and businesses located in rural counties.

(II)

For money contributed to the Colorado credit reserve, the oversight board may waive the requirements of this subsection (4)(d) or may establish alternative benchmarks for the percentage of loans supported by the program that are made to businesses owned by socially and economically disadvantaged individuals, including businesses owned by women, minorities, and veterans and to businesses located in rural counties.

(e)

A loan program manager shall work with the division of business funding and incentives within the office of economic development to align the program with other access to capital programs in the state.

(5)

If the money in a tranche is not fully invested in small business loans as determined by the oversight board in the time period allowed under a contract, the portion of the unused money provided by the state shall be returned to the small business recovery fund.

(6)

Distributions or revenue paid to the state pursuant to a contract under this section shall be deposited in the small business recovery fund; except that, if such distributions or revenue are paid after the small business recovery fund is repealed, the money shall be paid to the state treasurer, who shall credit the money to the general fund.

(7)

The loan program manager shall report on the implementation of the loan program to the oversight board at least quarterly, within one month after the end of each calendar quarter, or more often if requested by the oversight board. The reports must include the information necessary to allow the board to provide the reports required in section 24-36-204 (12), and any additional information requested by the board.

Source: Section 24-36-205 — Small business recovery loan program - creation - requirements - oversight, https://leg.­colorado.­gov/sites/default/files/images/olls/crs2023-title-24.­pdf (accessed Oct. 20, 2023).

24‑36‑101
State treasurer head of department
24‑36‑102
Function of department - employees
24‑36‑103
All state moneys to be transmitted to department
24‑36‑104
Moneys to be deposited
24‑36‑105
Accounts to be kept - daily report
24‑36‑106
Record of warrants and checks - order of payment - paid warrants and checks - validation
24‑36‑107
Warrants or checks endorsed when not paid - exception
24‑36‑108
Notice of payment - when interest ceases
24‑36‑109
Time deposits
24‑36‑111
Authority to accept deposits
24‑36‑111.5
Authority to invest in real property owned by a school district
24‑36‑112
Deposits in savings and loan associations
24‑36‑113
Investment of state money - limitations
24‑36‑114
How interest earnings credited - management fee
24‑36‑115
Moneys not immediately creditable - special purpose moneys
24‑36‑116
Moneys paid under protest - disposition
24‑36‑117
Governor may make examination
24‑36‑118
Applications for licenses - authority to suspend licenses - rules
24‑36‑120
Authority to assess transaction fees
24‑36‑121
Authority to manage state public financing - state public financing cash fund - rules - legislative declaration - definitions
24‑36‑121.5
Use of security tokens for state capital financing - feasibility study - authorization of use - legislative declaration - definitions
24‑36‑122
Law enforcement officers and firefighters - work-related death - continuation of medical benefits for dependants - cash fund - created - definitions
24‑36‑123
Rent reporting for credit pilot program - Colorado housing and finance authority - appropriations - repeal
24‑36‑201
Short title
24‑36‑202
Legislative declaration
24‑36‑203
Definitions
24‑36‑204
Small business recovery loan program oversight board - creation - report - repeal
24‑36‑205
Small business recovery loan program - creation - requirements - oversight
24‑36‑206
Small business recovery tax credits - authorization to issue - terms - report
24‑36‑207
Use of small business recovery tax credits - carry over
24‑36‑208
Small business recovery fund - repeal
24‑36‑209
Office of economic development
24‑36‑210
Repeal of part
24‑36‑301
Short title
24‑36‑302
Legislative declaration
24‑36‑303
Definitions
24‑36‑304
Colorado household financial recovery pilot program - created - selection of administrators - grants
24‑36‑305
Report
24‑36‑306
Colorado household financial recovery pilot program fund - created - transfer - gifts, grants, and donations authorized
Green check means up to date. Up to date

Current through Fall 2024

§ 24-36-205’s source at colorado​.gov