[Code of Federal Regulations]
[Title 25, Volume 1]
[Revised as of April 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 25CFR286]

[Page 809-810]
 
                            TITLE 25--INDIANS
 
     CHAPTER I--BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR
 
PART 286_INDIAN BUSINESS DEVELOPMENT PROGRAM--Table of Contents
 
Sec.  286.17  Grant limitations and requirements.

    (a) Grants will be made to assist in establishing new economic 
enterprises, or in purchasing or expanding established ones. However, a 
grant may be made only when in the opinion of the Assistant Secretary 
the applicant is unable to obtain adequate financing from other sources. 
Prior to making any grant, the Assistant Secretary shall assure that, to 
the extent practical, the applicant's own resources have been invested 
in the proposed project. The applicant shall not be required to invest 
own resources to the extent that they are already committed to endeavors 
deemed by the Assistant Secretary to be essential to the welfare of the 
applicant. If the information in an application, which must include 
personal financial statements, indicates that it may be possible for the 
applicant to obtain financing without a grant, the Assistant Secretary 
will require the applicant to furnish letters from two customary lenders 
in the area, if available, who are making loans for similar purpose, 
showing whether or not they will make a loan to the applicant for the 
total financing needed without a grant.
    (b) A grant may be made only to an applicant who is able to obtain 
at least 75 percent of the necessary financing from other sources.
    (c) No grant in excess of $250,000 may be made to an Indian tribe or 
in excess of $100,000 to an Indian individual, partnership, corporation, 
or cooperative association.
    (d) Revolving loan funds as prescribed in title I of the Indian 
Financing Act of 1974 and guaranteed or insured loans as prescribed in 
title II of said Act may not be used as the sources of the loan portion 
of the total financing requirement if financing from other governmental 
or institutional lenders is available on reasonable terms and 
conditions. If a loan is not available from other sources, guaranteed or 
insured loans under the provisions of title II of said Act may then be 
considered. If a guaranteed or insured loan is not available loans under 
the provisions of title I of said Act may then be considered. Applicants 
for a loan from either source must meet the eligibility requirements for 
such loans.
    (e) A grant will not be approved unless there is assurance the 
applicant can and will be provided with needed competent technical and 
management assistance commensurate with the nature of the enterprise to 
be funded and the knowledge and management skills of the applicant.
    (f) Grant funds may not be used for refinancing or debt 
consolidation unless approval is justified and required

[[Page 810]]

due to the applicant's financial position and is clearly to the 
advantage of the grant applicant.
    (g) Ordinarily, not more than one grant will be made for a project. 
Nevertheless, in certain circumstances a second grant may be made to 
applicants for a new project or expansion of the original project. An 
additional grant will not be approved for an economic enterprise 
previously funded under the provisions of title IV of the Indian 
Financing Act of 1974 except for expanding a successful enterprise, 
provided the total of grants made shall not exceed $250,000 to an Indian 
tribe and $100,000 to an Indian individual, partnership, corporation, or 
cooperative association.
    (h) An application for a second grant will not be approved if the 
applicant:
    (1) Has not complied with the reporting requirements in connection 
with the first grant, or
    (2) Has not followed the plan of operation, if any, developed for 
the management and operation of the economic enterprise, or
    (3) Did not follow and use the management and technical assistance 
furnished, or
    (4) Is in violation of one or more provisions of the loan agreement 
entered into between the applicant and the lender who furnished the loan 
portion of the financing in connection with the first grant.
    (i) An applicant for an expansion grant must meet the same 
eligibility requirements as an original applicant.
    (j) A grantee will be required to return all or a portion of the 
grant if the business or enterprise for which the grant was utilized is 
sold within three years of the date on which the grant was disbursed to 
the grantee, unless the proceeds from the sale are re-invested in a new 
business or business expansion which will benefit the Indian reservation 
economy. Such sale and re-investment must have the prior approval of the 
local agency superintendent. The grantee shall refund the lessor of the 
grant amount or a pro rata portion of sales proceeds. The pro rata 
portion of sales proceeds shall be based on the ratio of grant amount to 
its corresponding matching financing. The new business or business 
expansion utilizing such sale proceeds must meet the same criteria for 
eligibility as an original grant.

[39 FR 44748, Dec. 27, 1974. Redesignated at 47 FR 13328, Mar. 30, 1982, 
as amended at 55 FR 36274, Sept. 5, 1990; 56 FR 12436, Mar. 25, 1991]