(a) Term of loan. The following requirements regarding the maximum term of a loan apply to any loan made under the program.      
        (1) Real property. The maximum term of a loan to finance real property may not exceed 20 years.       
        (2) Tangible personal property. The maximum terms of a loan to finance tangible personal property may not exceed 15 years.       
        (3) Other loans. The maximum term of a loan shall have a maturity satisfactory to the board and any third-party guarantor or insurer.       
      (b) Interest rate. The interest rate shall be determined by the board or its designee, considering, among other things, the funding needed to cover the cost of bond financing, bond service providers and reasonable and customary administrative and programmatic costs.     
      (c) Amortization. Each loan shall be repaid over the term of the loan in a manner acceptable to the program and any third party, insurer, or guarantor of the loan.     
      (d) Terms and conditions of financing. Terms and conditions of financing must include requirements for, at minimum, the repayment of loan principal and interest payments and security or collateral, such as equity interest, royalties, patent rights, or a combination of those royalties and interests from or in the product or the proceeds of the product for which financing is requested.     
      (e) Security. Unless otherwise approved by the board, no loan may be made by the bank to an applicant if the applicant's equity participation in its business, if required by the bank, came from a loan secured by a lien on the business.     
      (f) Other terms. The bank and the board shall specify terms and conditions with respect to each investment as they deem to be reasonable, appropriate and consistent with the purposes and objectives of the fund.     
     Source Note:        The provisions of this §177.5 adopted to be effective May 29, 2005, 30 TexReg 3089