Section 345 | Conditions to be met in relation to loans

(1)Condition A of this section is that either—

(a)the CDFI receives from the investor, on the investment date, the full amount of the loan, or

(b)if the loan agreement authorises the CDFI to draw down amounts of the loan over a period of time, the end of that period is not later than 18 months after the investment date.

(2)Condition B is that the loan must not carry any present or future right to be converted into or exchanged for a loan which is, or securities, shares or other rights which are, redeemable within the 5 year period.

(3)Condition C is that the loan must not have been made on terms that allow any person to require—

(a)the repayment during the first two years of the 5 year period of any of the loan capital advanced in those two years,

(b)the repayment during the third year of that period of more than 25% of the loan capital outstanding at the end of those two years,

(c)the repayment before the end of the fourth year of that period of more than 50% of that loan capital, or

(d)the repayment before the end of that period of more than 75% of that loan capital.

(4)Subsection (3) does not apply if the CDFI is required to make the repayment as a result of its failure to meet any obligation of the loan agreement which—

(a)is imposed merely because of the commercial risks to which the investor is exposed as lender under that agreement, and

(b)is no more likely to be breached than any obligation that might reasonably have been agreed in respect of the loan in the absence of this Part.

(5)The Treasury may by order substitute any other percentage for any percentage for the time being specified in subsection (3).

(6)Any such substitution is to have effect in relation to loans made by an individual on or after the date specified in the order.