The director of business, economic development, and tourism may make two types of loans:

The director may negotiate contracts with private financial institutions upon reasonable terms for the participation of the institutions with the State in the making of loans pursuant to this part including but not limited to a term by which the financial institutions undertake to service the loan. Participation agreement shall provide that at least ten per cent of the total loan be comprised of funds from the private financial institution. The private financial institution’s share of the disbursement of funds of any loan shall be the same percentage agreed upon for its participation in the total amount of that loan. No direct loan shall be made unless a participating loan cannot be negotiated at reasonable terms.