[Federal Register Volume 75, Number 205 (Monday, October 25, 2010)]
[Notices]
[Page 65534]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-26921]
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SMALL BUSINESS ADMINISTRATION
Immediate Disaster Assistance Program (IDAP)
AGENCY: U.S. Small Business Administration (SBA).
ACTION: Notice of IDAP loan program interest rates.
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SUMMARY: This Notice announces the maximum allowable rates for
Immediate Disaster Assistance Program (IDAP) loans.
DATES: Effective Date: The interest rate is effective October 25, 2010.
FOR FURTHER INFORMATION CONTACT: Grady Hedgespeth, Director of
Financial Assistance, at (202) 205-7562 or [email protected].
SUPPLEMENTARY INFORMATION: The Food, Conservation, and Energy Act of
2008 (the Farm Act), Public Law 110-246, enacted June 18, 2008, amended
the Small Business Act (the Act) and authorized changes to make SBA's
disaster assistance program more accessible to disaster victims. One
provision included in the Farm Act requires SBA to implement an
Immediate Disaster Assistance Program (IDAP) to provide interim loans
to businesses affected by a disaster that meet the basic eligibility
standards for a disaster loan authorized under section 7(b) of the Act.
The provision authorizes SBA to provide an 85 percent guarantee on
loans made by participating lenders for up to $25,000. The intent of
the IDAP loan program is to provide bridge financing as quickly and as
prudently as possible following a declared disaster while the business
is awaiting approval for permanent financing through a direct disaster
loan from SBA.
Agency regulations implementing the IDAP loan program state that
the maximum interest rates an IDAP Lender may charge an IDAP Borrower
during the Initial Period and Term Period will be published in the
Federal Register from time to time. 13 CFR 123.703(e). This notice
establishes the maximum interest rates for IDAP loans as follows:
Initial Period: The maximum interest rate an IDAP Lender may charge
an IDAP Borrower during the Initial Period (as defined in 13 CFR
123.700(b)(1)) is the prime rate in effect on the first business day of
the month in which SBA receives the IDAP loan application, as printed
in a national financial newspaper published each business day, plus one
percentage point. The interest rate must remain fixed while the IDAP
loan is in the Initial Period.
Term Period: In the event that the IDAP loan enters the Term Period
(as defined in 13 CFR 123.700(b)(17)), the interest rate may remain
fixed at a rate not to exceed the maximum rate for the Initial Period
as described above or may begin to fluctuate at a variable rate that is
not more than the prime rate in effect on the first business day of the
month in which the Term Period begins, as printed in a national
financial newspaper published each business day, plus one percentage
point. If the rate during the Term Period is a variable rate, the
lender must specify in the Note the frequency at which the interest
rate adjustment will occur (the ``adjustment period''), and such
adjustments may not occur more frequently than monthly. The lender
shall adjust the interest rate on the first calendar day of each
adjustment period using the prime rate in effect on the first business
day of the adjustment period, plus one percentage point. The change in
interest rate is effective on that day whether or not the lender gives
the borrower notice of the change. The adjustment period may not be
changed without the written agreement of the borrower.
Any future change to interest rates on IDAP Loans will be published
in the Federal Register.
Authority: 15 U.S.C. 657n and 13 CFR Sec. 123.703(e).
Eric R. Zarnikow,
Associate Administrator, Office of Capital Access.
[FR Doc. 2010-26921 Filed 10-22-10; 8:45 am]
BILLING CODE 8025-01-P