CFR

1980.420—Loan guarantee limits.

The percentage of guarantee, up to the maximum allowed by this section, is a matter of negotiation between the lender and FmHA or its successor agency under Public Law 103-354.

(a) For loans of $2 million or less, the maximum percentage of guarantee is 90 percent.

(b) For loans over $2 million but not over $5 million, the maximum percentage of guarantee is 80 percent.

(d) Lenders and borrowers will propose the percentage of guarantee. FmHA or its successor agency under Public Law 103-354 informs lenders and borrowers in writing on Form FmHA or its successor agency under Public Law 103-354 449-14 of any percentage of guarantee less than proposed by the lender and borrower, and the reasons therefore. FmHA or its successor agency under Public Law 103-354 determines the percentage of guarantee after considering all credit factors involved, including but not limited to:

(1) Borrower's management. The borrower's management, and when appropriate, equity capital, history of operation, marketing plan, raw material requirements, and availability of necessary supporting utilities and services;

(2) Collateral. Collateral for the loan;

(3) Financial condition. Financial condition of borrower or borrower's principals, if appropriate;

(4) Lender's exposure. The lender's exposure before and after the loan, and any applicable limits on the lender's lending authority; and

(5) Trends and conditions. Current trends and economic conditions.

Code of Federal Regulations

[53 FR 40401, Oct. 17, 1988]

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