(1) The criteria used by the department to make development loans to a certified MBDC will include the criteria required for certification as a MBDC as set forth in ARM 8.99.404 plus the following additional requirements:

(a) legally binding commitment(s) for MBDC operating income other than earned income from the revolving loan fund; and

(b) legally binding commitment(s) for MBDC matching loan funds.

(2) Development loan funds will be awarded pursuant to a promissory note, development loan agreement, and security agreement between the department and the MBDC.

(3) The department will consider the following in determining the amount of a development loan awarded to a MBDC:

(a) financial stability and sources and sufficiency of operating income generated from the proposed revolving loan fund and/or provided from other income sources of the MBDC;

(b) market potential of the MBDC;

(c) expertise and, where applicable, performance of the MBDC in the management of a revolving loan fund;

(d) geographic and rural-to-urban balance in distribution of program funds;

(e) the amount of nondepartment derived funds contributed to the revolving loan fund by the certified MBDC in addition to the required matching loan funds; and

(f) the feasibility of the financial projections for the revolving loan fund provided by the certified MBDC, taking into account market size and activity, historic loan volume, and financial performance of the certified MBDC.

(4) A development loan will not be extended to a certified MBDC unless:

(a) there is adequate assurance of repayment of the development loan based on the fiscal and managerial capabilities of the certified MBDC;

(b) the amount of the development loan together with the required MBDC matching loan funds and other funds available is adequate to achieve the purposes for which the development loan is made; and

(c) any delinquent debt to the federal government or the state of Montana by the MBDC is satisfied. Development loan funds may not be used to satisfy the debt.