Loan Program Guidelines
- Loan Amount: A requested loan for an eligible project shall be made seeking an amount of at least $25,000.
- Loan Term: The minimum loan term will be 5 years; however, loans may be prepaid without penalty. The maximum term of a loan is limited to the lesser of 20 years or the useful life of the project. The loan term does not include the spend-down period.
- Spend-down: There will be a maximum spend-down period of 5 years. During this period, interest will accrue on any draws and compound annually. At the end of the spend-down period, any accrued interest may either be paid in full or amortized over the term of the loan. Including the spend-down period, the loan must be completely paid down within 25 years of the initial extension of loan proceeds.
- Loan Repayments: Loan repayments will be due monthly and collected via automatic debit. Under certain circumstances, loan terms and schedules may be modified subject to negotiation and approval.
- Loan Prepayment: There will be no penalty for prepayment. However, if a loan is modified, the terms of the modified loan may be negotiated on a case by case basis.
- Interest: During the spend-down period, the GTIB will retain any interest on funds earmarked for the borrower’s projects that have not yet been drawn.
- GEFA Review: Upon receiving a loan application for an eligible project, the GTIB will submit the applicant’s financial information to the Georgia Environmental Finance Authority (GEFA) to determine the financial feasibility of the request. The GTIB will advise the applicant if it is suitable after this review.
Loan Program Fees
The Application Fee is $250. A check must be made payable to the State Road & Tollway Authority (SRTA) and be received by the GTIB at the appropriate address as provided in the application within 2 weeks of submitting the application. $50.00 of the Application Fee is nonrefundable. Once the analysis phase of the Application begins, the remaining $200.00 of the Application Fee becomes non-refundable.
Loan Closing Fee: In addition to the $250 Application Fee, a 1% closing fee will be calculated and assessed at closing. The borrower may choose to pay this fee directly or submit a requisition to pay this fee from the loan amount. If the borrower chooses to have the Loan Closing Fee deducted from the principal amount, borrower must ensure that it will still have enough remaining funding to fully fund the project.
Interest Rate Determination
GTIB interest rates are tied to the cost of capital for the state and are similar to other state agencies that issue loans. As an example, as of January 2018, the interest rate for a 20-year Georgia Environmental Finance Authority (GEFA) state loan is 2.39%. Loan rates will be determined after award and will be based on applicable state rates at that time. Loan rates will also be adjusted based on the agreed upon length of the loan (inclusive of spend-down period and loan term, maximum of 25 years).
Application Review and Selection
If the Application is complete and all eligibility requirements are met, the Application will be evaluated by SRTA staff for competitiveness and submitted to the GTIB Advisory Committee for consideration. After Advisory Committee review a recommendation will be made to the SRTA Board, who will approve or deny the application. If the project is not approved for award, SRTA will notify the applicant. If the Application is approved, SRTA staff will advise the applicant and coordinate documents required for awarding funds.
Project Modifications and Adjustments
The GTIB realizes that costs may change or projects may be modified between the time that an Application is filed and the time of actual construction. The Applicant should inform the GTIB of all material changes, in writing, as soon as possible. If a loan agreement has not been signed and a change to the Application is required or requested, the Applicant should file a supplemental Application with the GTIB.
If the material change occurs after a loan agreement has been executed, the Applicant shall inform the GTIB, in writing, as soon as possible. The GTIB may require the borrower to submit an amendment.
Upon an application being approved by the SRTA Board, the GTIB will coordinate the closing of the loan. The borrower shall pay for all costs incurred in the closing of the loan. Loan documents are prepared by the GTIB. The primary loan document is the loan agreement and its accompanying exhibits and forms. The loan agreement, including its exhibits, provides the terms of the loan. Draft copies of the agreement are sent to the Applicant and to Applicant’s legal counsel for review. No changes to the forms are permitted without the express written approval of the GTIB.
The borrower must provide additional documents at closing. At a minimum, these will include a resolution authorizing the borrowing, an opinion of counsel addressing the legality of the transaction and such other closing documents as are required by the GTIB. If the borrower is securing the loan with a dedicated sales tax, proof of the statutorily required public approval of the sales tax must be provided. The GTIB will notify the borrower of the Closing Date.