[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR307.11]

[Page 625-626]
 
                TITLE 13--BUSINESS CREDIT AND ASSISTANCE
 
CHAPTER III--ECONOMIC DEVELOPMENT ADMINISTRATION, DEPARTMENT OF COMMERCE
 
PART 307_ECONOMIC ADJUSTMENT ASSISTANCE INVESTMENTS--Table of Contents
 
Subpart B_Special Requirements for Revolving Loan Funds and Use of Grant 
                                  Funds
 
Sec.  307.11  Disbursement of funds to Revolving Loan Funds.

    (a) Pre-disbursement requirements. Prior to any disbursement of EDA 
funds, RLF Recipients are required to provide in a form acceptable to 
EDA:
    (1) Evidence of fidelity bond coverage for persons authorized to 
handle funds under the Grant award in an amount sufficient to protect 
the interests of EDA and the RLF. Such insurance coverage must exist at 
all times during

[[Page 626]]

the duration of the RLF's operation; and
    (2) Evidence of certification in accordance with Sec.  307.15(b)(1).
    (b) Timing of request for disbursements. An RLF Recipient shall 
request disbursements of Grant funds only to close a loan or disburse 
RLF funds to a borrower. The RLF Recipient must disburse the RLF funds 
to a borrower within thirty (30) days of receipt of the Grant funds. Any 
Grant funds not disbursed within the thirty (30) day period shall be 
refunded to EDA pursuant to paragraph (e) of this section.
    (c) Amount of disbursement. The amount of a disbursement of Grant 
funds shall not exceed the difference, if any, between the RLF Capital 
and the amount of a new RLF loan, less the amount, if any, of the Local 
Share required to be disbursed concurrent with the Grant funds. However, 
RLF Income held to reimburse eligible administrative costs need not be 
disbursed in order to draw additional Grant funds.
    (d) EDA funds account. The RLF Recipient shall establish and 
maintain an interest-bearing account designated as the ``EDA funds 
account,'' indicating that monies deposited therein are held for funding 
approved Closed Loans. The RLF Recipient shall withdraw funds or order a 
transfer from the EDA funds account for lending to eligible borrowers or 
return of funds to EDA.
    (e) Delays. If the RLF Recipient receives Grant funds and the RLF 
loan disbursement is subsequently delayed beyond thirty (30) days, the 
RLF Recipient must notify the applicable grants officer and return such 
non-disbursed funds to EDA. Grant funds returned to EDA shall be 
available to the RLF Recipient for future draw-downs. When returning 
prematurely drawn Grant funds, the RLF Recipient must clearly identify 
on the face of the check or in the written notification to the 
applicable grants officer ``EDA,'' the Grant award number, the words 
``Premature Draw,'' and a brief description of the reason for returning 
the Grant funds.
    (f) Local Share. (1) Cash Local Share of the RLF may only be used 
for lending purposes. The cash Local Share must be used either in 
proportion to the Grant funds or at a faster rate than the Grant funds.
    (2) When an RLF has a combination of In-Kind Contributions and cash 
Local Share, the cash Local Share and the Grant funds will be disbursed 
proportionately as needed for lending activities, provided that the last 
twenty (20) percent of the Grant funds may not be disbursed until all 
cash Local Share has been expended. The full amount of the cash Local 
Share shall remain for use in the RLF.