Section 103.12 - How does a lender apply for a loan guaranty?To apply for a loan guaranty, a BIA-approved lender must submit to BIA a loan guaranty application request form, together with each of the following:
(a) A written explanation from the lender indicating why it needs a BIA guaranty for the loan, and the minimum loan guarantee percentage it will accept;(b) A copy of the borrower's complete loan application;(c) A description of the borrower's equity in the business being financed;(d) A copy of the lender's independent credit analysis of the borrower's business, repayment ability, and loan collateral (including insurance);(e) An original report from a nationally-recognized credit bureau, dated within 90 days of the date of the lender's loan guaranty application package, outlining the credit history of the borrower, and to the extent permitted by law, each co-maker or guarantor of the loan (if any);(f) A copy of the lender's loan commitment letter to the borrower, showing at a minimum the proposed loan amount, purpose, interest rate, schedule of payments, and security (including insurance requirements), and the lender's terms and conditions for funding;(g) The lender's good faith estimate of any loan-related fees and costs it will charge the borrower, as authorized under this part;(h) If any significant portion of the loan will be used to finance construction, renovation, or demolition work, the lender's:(1) Insurance and bonding requirements for the work;(2) Proposed draw requirements; and(3) Proposed work inspection procedures;(i) If any significant portion of the loan will be used to refinance or otherwise retire existing indebtedness:(1) A clear description of all loans being paid off, including the names of all makers, cosigners and guarantors, maturity dates, payment schedules, uncured delinquencies, collateral, and payoff amounts as of a specific date; and(2) A comparison of the terms of the loan or loans being paid off and the terms of the new loan, identifying the advantages of the new loan over the loan being paid off.