cfr_sections
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| section_id ▼ | title_number | title_name | chapter | subchapter | part_number | part_name | subpart | subpart_name | section_number | section_heading | agency | authority | source_citation | amendment_citations | full_text |
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| 7:7:15.1.19.2.5.1.7.1 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | § 4279.1 Introduction. | RBS | [81 FR 35997, June 3, 2016, as amended at 85 FR 31040, May 22, 2020; 85 FR 62196, Oct. 2, 2020] | (a) As of October 1, 2020, this subpart is specifically applicable to and only contains regulations for Business and Industry loans under the authority of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Pub. L. 116-136) to provide B&I guarantees for loans needed as a result of the Coronavirus Disease 2019 (COVID-19) pandemic for working capital loan purposes to support business operations and facilities in rural areas (B&I CARES Act Program Loans). Some of the requirements of this subpart are waived or altered for B&I CARES Act Program Loans. The waivers and alterations are provided in § 4279.190 of this subpart. Other than B&I CARES Act Program Loans, this subpart is no longer used for making Business and Industry (B&I) loans guaranteed by the Agency. Subpart B of part 4287 of this chapter is retained for servicing B&I CARES Act Program Loans and B&I loans guaranteed by the Agency prior to October 1, 2020. Requirements for B&I loans guaranteed by the Agency after October 1, 2020 (other than B&I CARES Act Loans) may be found at 7 CFR part 5001. (b) The lender is responsible for ascertaining that all requirements for making, securing, servicing, and collecting the loan are complied with. (c) Whether specifically stated or not, whenever Agency approval is required, it must be in writing. Copies of all forms and regulations referenced in this subpart may be obtained from any Agency office and from the USDA Rural Development Web site at http://www.rd.usda.gov/publications. Whenever a form is designated in this subpart, it is initially capitalized and its reference includes predecessor and successor forms, if applicable. | ||||
| 7:7:15.1.19.2.5.1.7.10 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | § 4279.44 Access to records. | RBS | The lender must permit representatives of the Agency (or other agencies of the United States) to inspect and make copies of any records of the lender pertaining to Agency guaranteed loans during regular office hours of the lender or at any other time upon agreement between the lender and the Agency. In addition, the lender must cooperate fully with Agency oversight and monitoring of all lenders involved in any manner with any guarantee to ensure compliance with this subpart, subpart B of this part, and subpart B of part 4287 of this chapter. Such oversight and monitoring will include, but is not limited to, reviewing lender records and meeting with lenders in accordance with subpart B of part 4287 of this chapter. | |||||
| 7:7:15.1.19.2.5.1.7.11 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | §§ 4279.45-4279.58 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.1.7.12 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | § 4279.59 Environmental requirements. | RBS | The Agency is responsible for ensuring that the requirements of the National Environmental Policy Act of 1969 (under 40 CFR part 1500) and related compliance actions, such as Section 106 of the National Historic Preservation Act (under 36 CFR part 800) and Section 7 of the Endangered Species Act, are met and will complete the appropriate level of environmental review in accordance with 7 CFR part 1970, “Environmental Policies and Procedures,” or successor regulation. Because development of the loan application occurs simultaneously with development of the environmental review, applicants, including lenders and borrowers, must not take any actions or incur any obligations that would either limit the range of alternatives to be considered in the environmental review or that would have an adverse effect on the environment. Satisfactory completion of the environmental review process must occur prior to issuance of the Conditional Commitment to the lender. | |||||
| 7:7:15.1.19.2.5.1.7.13 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | § 4279.60 Civil rights impact analysis. | RBS | Issuance of a Conditional Commitment is conditioned on the Agency being able to satisfactorily complete a civil rights impact analysis. | |||||
| 7:7:15.1.19.2.5.1.7.14 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | § 4279.61 Equal Credit Opportunity Act. | RBS | In accordance with the Equal Credit Opportunity Act (15 U.S.C. 1691 et seq. ), with respect to any aspect of a credit transaction, neither the lender nor the Agency will discriminate against any applicant on the basis of race, color, religion, national origin, sex, marital status, or age (providing the applicant has the capacity to contract), or because all or part of the applicant's income derives from a public assistance program, or because the applicant has, in good faith, exercised any right under the Consumer Protection Act. The lender must comply with the requirements of the Equal Credit Opportunity Act as contained in the Federal Reserve Board's Regulation implementing that Act (see 12 CFR part 202) prior to loan closing. | |||||
| 7:7:15.1.19.2.5.1.7.15 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | §§ 4279.62-4279.70 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.1.7.16 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | § 4279.71 Public bodies and nonprofit corporations. | RBS | Audits will be required of any public body, nonprofit corporation or Indian Tribe that receives a guaranteed loan that meets the thresholds established by 2 CFR part 200, subpart F. Any audit provided by a public body, nonprofit corporation, or Indian Tribe required by this paragraph will be considered adequate to meet the audit requirements of the B&I program for that year. | |||||
| 7:7:15.1.19.2.5.1.7.17 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | § 4279.72 Conditions of guarantee. | RBS | [81 FR 35997, June 3, 2016, as amended at 83 FR 11634, Mar. 16, 2018] | A loan guarantee under this part will be evidenced by a Loan Note Guarantee issued by the Agency. The provisions of this part and part 4287 of this chapter will apply to all outstanding guarantees. In the event of a conflict between the guarantee documents and these regulations as they exist at the time the documents are executed, these regulations will control. (a) Full faith and credit. A guarantee under this part constitutes an obligation supported by the full faith and credit of the United States and is incontestable except for fraud or misrepresentation of which a lender or holder has actual knowledge at the time it becomes such lender or holder or which a lender or holder participates in or condones. The guarantee will be unenforceable by the lender to the extent that any loss is occasioned by a provision for interest on interest or default or penalty interest. In addition, the guarantee will be unenforceable by the lender to the extent any loss is occasioned by the violation of usury laws, use of loan proceeds for unauthorized purposes, negligent loan origination, negligent loan servicing, or failure to obtain or maintain the required security regardless of the time at which the Agency acquires knowledge thereof. Any losses occasioned will be unenforceable by the lender to the extent that loan funds were used for purposes other than those specifically approved by the Agency in its Conditional Commitment or amendment thereof in accordance with § 4279.173(b). The Agency may for cause terminate or reduce the Loan Note Guarantee at any time. The Agency will guarantee payment as follows: (1) To any holder, 100 percent of any loss sustained by the holder on the guaranteed portion of the loan it owns and on interest due on such portion less any outstanding servicing fee. For those loans closed on or after August 2, 2016, the lender or the Agency will issue an interest termination letter to the holder(s) establishing the termination date for interest accrual. The guarantee will not cover interest to any ho… | ||||
| 7:7:15.1.19.2.5.1.7.18 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | §§ 4279.73-4279.74 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.1.7.19 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | § 4279.75 Sale or assignment of guaranteed loan. | RBS | The lender may sell all or part of the guaranteed portion of the loan on the secondary market or retain the entire loan. The lender must fully disburse and properly close a loan prior to sale of the note(s) on the secondary market. The lender cannot sell or participate any amount of the guaranteed or unguaranteed portion of the loan to the borrower or its parent, subsidiary, or affiliate or to officers, directors, stockholders, other owners, or members of their immediate families. The lender cannot share any premium received from the sale of a guaranteed loan in the secondary market with a loan packager or other loan service provider. If the lender desires to market all or part of the guaranteed portion of the loan at or subsequent to loan closing, such loan must not be in default. Lenders may use either the single note or multi-note system as outlined in paragraphs (a) and (b) of this section. The lender may also obtain participation in the loan under its normal operating procedures; however, the lender must retain title to the notes if any of them are unguaranteed and retain the lender's interest in the collateral. (a) Single note system. The entire loan is evidenced by one note, and one Loan Note Guarantee is issued. The lender must retain title to the note, retain the lender's interest in the collateral, and retain the servicing responsibilities for the guaranteed loan. When the loan is evidenced by one note, the lender may not at a later date cause any additional notes to be issued. The lender may assign all or part of the guaranteed portion of the loan to one or more holders by using an Assignment Guarantee Agreement. The lender must complete and execute the Assignment Guarantee Agreement and return it to the Agency for execution prior to holder execution. In order to validate authenticity, holders are encouraged to consult with the Agency. Additionally, a Certificate of Incumbency and Signature may be requested. The holder, with written notice to the lender and the Agency, may reassign the unpaid guaran… | |||||
| 7:7:15.1.19.2.5.1.7.2 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | § 4279.2 Definitions and abbreviations. | RBS | (a) Definitions. The following definitions apply to this subpart: Administrator. The Administrator of Rural Business-Cooperative Service within the Rural Development mission area of the U.S. Department of Agriculture. Affiliate. An entity that is related to another entity by owning shares or having an interest in the entity, by common ownership, or by any means of control. Agency. The Rural Business-Cooperative Service or successor Agency assigned by the Secretary of Agriculture to administer the B&I Guaranteed Loan Program. References to the National or State Office should be read as prefaced by “Agency” or “Rural Development” as applicable. Agricultural production. The breeding, raising, feeding, or housing of livestock for fiber or food for human consumption and the cultivation, growing, or harvesting of crops. Annual renewal fee. The annual renewal fee is a fee that is paid once a year by the lender and is required to maintain the enforceability of the Loan Note Guarantee. Appraisal surplus. The difference between the fair market value of an asset and its depreciated book value when the fair market value is higher. Arm's-length transaction. A transaction between ready, willing, and able disinterested parties that are not affiliated with or related to each other and have no security, monetary, or stockholder interest in each other. Assignment Guarantee Agreement. Form RD 4279-6, “Assignment Guarantee Agreement,” is the signed agreement among the Agency, the lender, and the holder containing the terms and conditions of an assignment of a guaranteed portion of a loan, using the single note system. Bankruptcy Code. The provisions of title 11 of the United States Code or any successor statute. Biofuel. A fuel derived from Renewable Biomass. Bond. A form of debt security in which the authorized issuer (borrower) owes the bond holder (lender) a debt and is obligated to repay the principal and interest (coupon) at a later date(s) (maturity). An explanation of the type of bond and other bond st… | |||||
| 7:7:15.1.19.2.5.1.7.20 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | § 4279.76 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.1.7.21 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | § 4279.77 Minimum retention. | RBS | The lender is required to hold in its own portfolio a minimum of 5 percent of the original total loan amount. The amount required to be maintained must be of the unguaranteed portion of the loan and cannot be participated to another. The lender may enter into no agreement that reduces its exposure below the minimum 5 percent it is required to retain in its portfolio. The lender may sell the remaining amount of the unguaranteed portion of the loan only through participation. | |||||
| 7:7:15.1.19.2.5.1.7.22 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | § 4279.78 Repurchase from holder. | RBS | (a) Repurchase by lender. A lender has the option to repurchase the unpaid guaranteed portion of the loan from a holder within 30 days of written demand by the holder when the borrower is in default not less than 60 days on principal or interest due on the loan; or when the lender has failed to remit to the holder its pro rata share of any payment made by the borrower within 30 days of the lender's receipt thereof. The repurchase by the lender must be for an amount equal to the unpaid guaranteed portion of principal and accrued interest less the lender's servicing fee. The holder must concurrently send a copy of the demand letter to the Agency. The lender must accept an assignment without recourse from the holder upon repurchase. For those loans closed on or after August 2, 2016, the lender or the Agency will issue an interest termination letter to the holder(s) establishing the termination date for interest accrual if the default is not cured. The guarantee will not cover interest to any holder accruing after the greater of: 90 days from the date of the most recent delinquency effective date as reported by the lender or 30 days from the date of the interest termination letter. If, in the opinion of the lender, repurchase of the guaranteed portion of the loan is necessary to adequately service the loan, the holder must sell the guaranteed portion of the loan to the lender for an amount equal to the unpaid principal and interest on such portion less the lender's servicing fee. The lender must not repurchase from the holder for arbitrage or other purposes to further its own financial gain. Any repurchase must only be made after the lender obtains the Agency's written approval. If the lender does not repurchase the guaranteed portion from the holder, the Agency may, at its option, purchase such guaranteed portion for servicing purposes. The lender is encouraged to repurchase the loan to facilitate the accounting of funds, resolve any loan problems, and prevent default, where and when reasonable. The benefit to the… | |||||
| 7:7:15.1.19.2.5.1.7.23 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | §§ 4279.79-4279.83 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.1.7.24 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | § 4279.84 Replacement of document. | RBS | (a) The Agency may issue a replacement Loan Note Guarantee or Assignment Guarantee Agreement that was lost, stolen, destroyed, mutilated, or defaced to the lender or holder upon receipt of an acceptable certificate of loss and an indemnity bond. (b) When a Loan Note Guarantee or Assignment Guarantee Agreement is lost, stolen, destroyed, mutilated, or defaced while in the custody of the lender or holder, the lender must coordinate the activities of the party who seeks the replacement documents and submit the required documents to the Agency for processing. The requirements for replacement are as follows: (1) A certificate of loss, notarized and containing a jurat, which includes: (i) Name and address of owner; (ii) Name and address of the lender of record; (iii) Capacity of person certifying; (iv) Full identification of the Loan Note Guarantee or Assignment Guarantee Agreement, including the name of the borrower, the Agency's case number, date of the Loan Note Guarantee or Assignment Guarantee Agreement, face amount of the evidence of debt purchased, date of evidence of debt, present balance of the loan, percentage of guarantee, and, if an Assignment Guarantee Agreement, the original named holder and the percentage of the guaranteed portion of the loan assigned to that holder. Any existing parts of the document to be replaced must be attached to the certificate; (v) A full statement of circumstances of the loss, theft, destruction, defacement, or mutilation of the Loan Note Guarantee or Assignment Guarantee Agreement; and (vi) For the holder, evidence demonstrating current ownership of the Loan Note Guarantee and promissory note or the Assignment Guarantee Agreement. If the present holder is not the same as the original holder, a copy of the endorsement of each successive holder in the chain of transfer from the initial holder to present holder must be included. If copies of the endorsement cannot be obtained, best available records of transfer must be submitted to the Agency ( e.g., order confirmation, c… | |||||
| 7:7:15.1.19.2.5.1.7.25 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | §§ 4279.85-4279.99 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.1.7.26 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | § 4279.100 OMB control number. | RBS | In accordance with the Paperwork Reduction Act of 1995, the information collection requirements contained in this subpart have been submitted to the Office of Management and Budget (OMB) under OMB Control Number 0570-0069 for OMB approval. | |||||
| 7:7:15.1.19.2.5.1.7.3 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | §§ 4279.3-4279.14 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.1.7.4 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | § 4279.15 Exception authority. | RBS | The Administrator may, on a case-by-case basis, grant an exception to any requirement or provision of this subpart provided that such an exception is in the best financial interests of the Federal government. Exercise of this authority cannot be in conflict with applicable law. | |||||
| 7:7:15.1.19.2.5.1.7.5 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | § 4279.16 Appeals. | RBS | Applicants, borrowers, lenders, and holders have appeal or review rights for Agency decisions made under this subpart, subpart B of this part, or subpart B of part 4287 of this chapter. Programmatic decisions based on clear and objective statutory or regulatory requirements are not appealable; however, such decisions are reviewable for appealability by the National Appeals Division (NAD). The borrower, lender, and holder can appeal any Agency decision that directly and adversely impacts them. For an adverse decision that impacts the borrower, the lender and borrower must jointly execute a written request for appeal for an alleged adverse decision made by the Agency. An adverse decision that only impacts the lender may be appealed by the lender only. An adverse decision that only impacts the holder may be appealed by the holder only. A decision by a lender adverse to the interest of the borrower is not a decision by the Agency, whether or not concurred in by the Agency. Appeals will be conducted by USDA NAD and will be handled in accordance with 7 CFR part 11. | |||||
| 7:7:15.1.19.2.5.1.7.6 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | §§ 4279.17-4279.28 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.1.7.7 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | § 4279.29 Eligible lenders. | RBS | [81 FR 35997, June 3, 2016, as amended at 81 FR 54477, Aug. 16, 2016] | An eligible lender must be domiciled in a State as defined in § 4279.2 or the District of Columbia and must not be debarred or suspended by the Federal government. If the lender is under a cease and desist order, or similar constraint, from a Federal or State agency, the lender must inform the Agency. The Agency will evaluate the lender's eligibility on a case-by-case basis, given the risk of loss posed by the cease and desist order. The Agency will only approve loan guarantees for lenders with adequate capital to fund and cover potential liquidation expenses for guaranteed loans it proposes to make and adequate experience and expertise to make, secure, service, and collect B&I loans. The lender must provide documentation as to its capital and experience in commercial lending. The lender and the Agency will execute a Lender's Agreement for each lender approved to participate in the program. If a valid Lender's Agreement already exists, it is not necessary to execute a new Lender's Agreement with each loan guarantee; however, a new Lender's Agreement must be executed with any existing lenders making new loans on or after August 2, 2016. The Agency may revoke a lender's eligible status at any time for cause, including those examples cited in § 4279.29(c). (a) Regulated lenders. A regulated lender is any Federal or State chartered bank, or other financial institution, Farm Credit Bank, other Farm Credit System institution with direct lending authority, Bank for Cooperatives, Savings and Loan Association, Savings Bank, or mortgage company that is part of a bank-holding company. These entities must be subject to credit examination and supervision by either an agency of the United States or a State. Eligible lenders may also include the National Rural Utilities Cooperative Finance Corporation and credit unions provided that they are subject to credit examination and supervision by either the National Credit Union Administration or a State agency. (b) Non-regulated lenders. The Agency may consider an applicant len… | ||||
| 7:7:15.1.19.2.5.1.7.8 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | § 4279.30 Lenders' functions and responsibilities. | RBS | (a) General. (1) Lenders have the primary responsibility for the successful delivery of the guaranteed loan program. Any action or inaction on the part of the Agency does not relieve the lender of its responsibilities to originate and service the loan guaranteed under this subpart, subpart B of this part, and subpart B of part 4287 of this chapter. Lenders may contract for services but are ultimately responsible for underwriting, loan origination, loan servicing, and compliance with all Agency regulations. No person may act as, or work for, both a loan packager and loan service provider on the same guaranteed loan. All lenders obtaining or requesting a loan guarantee are responsible for: (i) Processing applications for guaranteed loans; (ii) Developing and maintaining adequately documented loan files, which must be maintained for at least 3 years after any final loss has been paid; (iii) Recommending only loan proposals that are eligible and financially feasible; (iv) Properly closing the loan and obtaining valid evidence of debt and collateral in accordance with sound lending practices prior to disbursing loan proceeds; (v) Keeping an inventory accounting of all collateral items and reconciling the inventory of all collateral sold during loan servicing, including liquidation; (vi) Monitoring construction and operation; (vii) Distributing loan funds; (viii) Servicing guaranteed loans in a prudent manner, including liquidation if necessary; (ix) Reporting all conflicts of interest, or appearances thereof, to the Agency; (x) Following Agency regulations and agreements; and (xi) Obtaining Agency approvals or concurrence as required. (2) This subpart, subpart B of this part, and subpart B of part 4287 of this chapter contain the regulations for this program, including the lenders' responsibilities. If a lender fails to comply with these requirements, the Agency may reduce any loss payment in accordance with the applicable regulations. (b) Credit evaluation. The lender must analyze all credit factors … | |||||
| 7:7:15.1.19.2.5.1.7.9 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | A | Subpart A—General | §§ 4279.31-4279.43 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.2.7.1 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.101 Introduction. | RBS | [81 FR 36005, June 3, 2016, as amended at 85 FR 31040, May 22, 2020; 85 FR 62196, Oct. 2, 2020] | (a) Content. As of October 1, 2020, this subpart is specifically applicable to and only contains loan processing regulations for Business and Industry loans under the authority of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Pub. L. 116-136) to provide B&I guarantees for loans needed as a result of the Coronavirus Disease 2019 (COVID-19) pandemic for working capital loan purposes to support business operations and facilities in rural areas (B&I CARES Act Program Loans). Some of the requirements of this subpart are waived or altered for B&I CARES Act Program Loans. The waivers and alterations are provided in § 4279.190 of this subpart. This subpart is supplemented by subpart A of this part, which contains general guaranteed loan regulations, and subpart B of part 4287 of this chapter, which contains loan servicing regulations. Other than the B&I CARES Act Program Loans, this subpart is no longer used for loan processing requirements for Business and Industry (B&I) loans guaranteed by the Agency. Requirements for regular B&I loans (other than the B&I CARES Act Program Loans) may be found at 7 CFR part 5001. (b) Purpose. The purpose of the B&I Guaranteed Loan Program is to improve, develop, or finance business, industry, and employment and improve the economic and environmental climate in rural communities. This purpose is achieved by bolstering the existing private credit structure through the guarantee of quality loans that will provide lasting community benefits. It is not intended that the guarantee authority will be used for marginal or substandard loans or for relief of lenders having such loans. (c) Documents. Whether specifically stated or not, whenever Agency approval is required, it must be in writing. Copies of all forms and regulations referenced in this subpart may be obtained from any Agency office and from the USDA Rural Development Web site at http://www.rd.usda.gov/publications. Whenever a form is designated in this subpart, that designation includes predecessor and … | ||||
| 7:7:15.1.19.2.5.2.7.10 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.115 Cooperative stock/cooperative equity. | RBS | (a) Cooperative stock purchase program. The Agency may guarantee loans for the purchase of cooperative stock by individual farmers or ranchers in a farmer or rancher cooperative established for the purpose of processing an agricultural commodity. The cooperative may use the proceeds from the stock sale to recapitalize, to develop a new processing facility or product line, or to expand an existing production facility. The cooperative may contract for services to process agricultural commodities or otherwise process value-added agricultural products during the 5-year period beginning on the operation startup date of the cooperative in order to provide adequate time for the planning and construction of the processing facility of the cooperative. Loan proceeds must remain in the cooperative from which stock was purchased, and the cooperative must not reinvest those funds into another entity. The Agency may also guarantee loans for the purchase of transferable stock shares of any type of existing cooperative, which would primarily involve new or incoming members. Such stock may provide delivery or some form of participation rights and may only be traded among cooperative members. Paragraphs (5) through (7) of this section are not applicable for guaranteed loans for the purchase of transferable cooperative stock. (1) The maximum loan amount is the threshold established in § 4279.161(c), and all applications will be processed in accordance with § 4279.161(c). (2) The maximum term is 7 years. (3) The lender will, at a minimum, obtain a valid lien on the stock, an assignment of any patronage refund, and the ability to transfer the stock to another party, or otherwise liquidate and dispose of the collateral in the event of a borrower default. (4) The lender must complete a written credit analysis of each stock purchase loan and a complete credit analysis of the cooperative prior to making its first stock purchase loan. (5) The borrower may provide financial information in the manner that is generally required by com… | |||||
| 7:7:15.1.19.2.5.2.7.11 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.116 New Markets Tax Credit program. | RBS | [81 FR 36005, June 3, 2016, as amended at 82 FR 26335, June 7, 2017] | This section identifies the provisions specific to guaranteed loans involving projects that include new markets tax credits available under the New Markets Tax Credit (NMTC) program. Such applicants and applications must comply with the provisions in subparts A and B of this part, except as modified in this section. (a) Loan guarantees for Qualified Active Low Income Community Businesses (QALICB). (1) To be an eligible lender for a loan guarantee that involves NMTCs, the organization must meet the applicable eligibility criteria in § 4279.29 as otherwise modified by paragraphs (a)(1)(i) and (ii) of this section. (i) Sub-entities under the control of a non-regulated lender approved as a lender for this program do not need to separately meet the requirements of § 4279.29(b). An eligible non-regulated lender may modify its list of eligible sub-entities under its control at any time by notifying the Agency in writing. (ii) In order to take advantage of the requirement exemption in paragraph (a)(1)(i) of this section, the non-regulated lender must include in its application to be a lender each sub-entity under its control and must clearly define the multiple-entity organizational and control structure. In addition, the lender must include each such sub-entity in the audited financial statements, commercial loan portfolio, and commercial loan performance statistics. (2) The provisions of § 4279.117(q) notwithstanding, a lender that is a Department of Treasury certified Community Development Entity (CDE) or subsidiary of a CDE (sub-CDE) may have an ownership interest in the borrower provided that each of the conditions specified in paragraphs (a)(2)(i) through (iv) of this section is met. (i) The lender does not have an ownership interest in the borrower prior to the guaranteed loan application. (ii) The lender does not take a controlling interest in the borrower. (iii) The lender cannot provide equity or take an ownership interest in a borrower at a level that would result in the lender owning 20 percent or mo… | ||||
| 7:7:15.1.19.2.5.2.7.12 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.117 Ineligible purposes and entity types. | RBS | (a) Distribution or payment to an individual or entity that will retain an ownership interest in the borrower or distribution or payment to a beneficiary of the borrower. Distribution or payment to a member of the immediate family of an owner, partner, or stockholder will not be permitted, except for a change in ownership of the business where the selling immediate family member does not retain an ownership interest and the Agency determines the price paid to be reasonable. As this type of transaction is not an arm's length transaction, reasonableness of the price paid will be based upon an appraisal. In situations where there is common ownership or an otherwise closely-related company is being paid to do construction or installation work for a borrower, only documented costs associated with construction or installation can be paid with loan proceeds. Documented construction or installation costs may not include any profit or wages to a related person, and all work must be done at cost with no profit built into the cost. This paragraph does not apply to transfers of ownership for ESOPs or worker cooperatives, to cooperatives where the cooperative pays the member for product or services, or where member stock is transferred among members of the cooperative in accordance with § 4279.115. (b) Projects in excess of $1 million that would likely result in the transfer of jobs from one area to another and increase direct employment by more than 50 employees. However, this limitation is not to be construed to prohibit assistance for the expansion of an existing business entity through the establishment of a new branch, affiliate, or subsidiary of such entity if the establishment of such branch, affiliate, or subsidiary will not result in an increase in unemployment in the area of original location or in any other area where such entity conducts business operations, unless there is reason to believe that such branch, affiliate, or subsidiary is being established with the intention of closing down the operations of the ex… | |||||
| 7:7:15.1.19.2.5.2.7.13 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.118 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.2.7.14 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.119 Loan guarantee limits. | RBS | (a) Loan amount. The total amount of B&I loans to one borrower (including the guaranteed and unguaranteed portions, the outstanding principal and interest balance of any existing B&I guaranteed loans, and the new loan request) must not exceed $10 million, except as outlined in paragraphs (a)(1) and (2) of this section. In addition to the borrower loan limit, there is a guarantor loan limit of $50 million. (1) The Administrator may, at the Administrator's discretion, grant an exception to the $10 million limit for loans of $25 million or less under the following circumstances: (i) The project to be financed is a high-priority project as defined in § 4279.2. Priority points will be awarded in accordance with the criteria contained in § 4279.166; (ii) The lender must document to the satisfaction of the Agency that the loan will not be made and the project will not be completed if the guaranteed loan is not approved; and (iii) The percentage of guarantee will not exceed 60 percent. No exception to this requirement will be approved under paragraph (b) of this section for loans exceeding $10 million. (2) The Secretary, whose authority may not be redelegated, may approve guaranteed loans in excess of $25 million, at the Secretary's discretion, for rural cooperative organizations that process value-added agricultural commodities in accordance with § 4279.113(j)(1). (b) Percentage of guarantee. The percentage of guarantee, up to the maximum allowed by this section, is a matter of negotiation between the lender and the Agency. The maximum percentage of guarantee is 80 percent for loans of $5 million or less, 70 percent for loans between $5 and $10 million, and 60 percent for loans exceeding $10 million. For subsequent guaranteed loans, the maximum percentage of guarantee will be based on the cumulative amount of outstanding principal and interest of any existing B&I guaranteed loans and the new loan request. Notwithstanding the preceding, the Administrator may, at the Administrator's discretion, grant an exceptio… | |||||
| 7:7:15.1.19.2.5.2.7.15 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.120 Fees and charges. | RBS | There are two types of non-refundable fees—the guarantee fee and the annual renewal fee. These fees are to be paid by the lender but may be passed on to the borrower. (a) Guarantee fee. The guarantee fee is paid at the time the Loan Note Guarantee is issued and may be included as an eligible use of guaranteed loan proceeds. The amount of the guarantee fee is determined by multiplying the total loan amount by the guarantee fee rate by the percentage of guarantee. The rate of the guarantee fee is established by the Agency in an annual notice published in the Federal Register. Subject to annual limits set by the Agency in the published notice, the Agency may charge a reduced guarantee fee if requested by the lender for loans of $5 million or less when the borrower's business: (1) Supports value-added agriculture and results in farmers benefiting financially, (2) Promotes access to healthy foods, or (3) Is a high impact business development investment as defined in § 4279.2 and applied in accordance with § 4279.166(b)(4) and is located in a rural community that: (i) Is experiencing long-term population decline; (ii) Has remained in poverty for the last 30 years; (iii) Is experiencing trauma as a result of natural disaster; (iv) Is located in a city or county with an unemployment rate 125 percent of the Statewide rate or greater; or (v) Is located within the boundaries of a federally recognized Indian tribe's reservation or within tribal trust lands or within land owned by an Alaska Native Regional or Village Corporation as defined by the Alaska Native Claims Settlement Act. (b) Annual renewal fee. The annual renewal fee is paid by the lender to the Agency once a year. Payment of the annual renewal fee is required in order to maintain the enforceability of the guarantee as to the lender. (1) The Agency will establish the rate of the annual renewal fee in an annual notice published in the Federal Register. The amount of the annual renewal fee is determined by multiplying the outstanding principal loa… | |||||
| 7:7:15.1.19.2.5.2.7.16 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | §§ 4279.121-4279.124 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.2.7.17 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.125 Interest rates. | RBS | The interest rate for the guaranteed loan will be negotiated between the lender and the borrower and may be either fixed or variable, or a combination thereof, as long as it is a legal rate. Interest rates will not be more than those rates customarily charged borrowers for loans without guarantees and are subject to Agency review and approval. Lenders are encouraged to utilize the secondary market and pass interest-rate savings on to the borrower. (a) A variable interest rate must be a rate that is tied to a published base rate, published in a national or regional financial publication, agreed to by the lender and the Agency. The variable interest rate must be specified in the promissory note and may be adjusted at different intervals during the term of the loan, but the adjustments may not be more often than quarterly. The lender must incorporate, within the variable rate promissory note at loan closing, the provision for adjustment of payment installments. The lender must fully amortize the outstanding principal balance within the prescribed loan maturity in order to eliminate the possibility of a balloon payment at the end of the loan. (b) It is permissible to have different interest rates on the guaranteed and unguaranteed portions of the loan provided that the rate of the guaranteed portion does not exceed the rate on the unguaranteed portion, except for situations where a fixed rate on the guaranteed portion becomes a higher rate than the variable rate on the unguaranteed portion due to the normal fluctuations in the approved variable interest rate. (c) Any change in the base rate or fixed interest rate between issuance of Form RD 4279-3, “Conditional Commitment,” and Form RD 4279-5 must be approved in writing by the Agency. Approval of such change must be shown as an amendment to the Conditional Commitment in accordance with § 4279.173(b) and must be reflected on Form RD 1980-19, “Guaranteed Loan Closing Report.” (d) The lender's promissory note must not contain provisions for default or penalty intere… | |||||
| 7:7:15.1.19.2.5.2.7.18 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.126 Loan terms. | RBS | (a) The length of the loan term must be the same for both the guaranteed and unguaranteed portions of the loan. The maximum repayment for loans for real estate will not exceed 30 years; machinery and equipment repayment will not exceed the useful life of the machinery and equipment or 15 years, whichever is less; and working capital repayment will not exceed 7 years. The term for a debt refinancing loan may be based on the collateral the lender will take to secure the loan. (b) A loan's maturity will take into consideration the use of proceeds, the useful life of assets being financed and those used as collateral, and the borrower's ability to repay the loan. (c) Only loans that require a periodic payment schedule that will retire the debt over the term of the loan without a balloon payment will be guaranteed. (d) The first installment of principal and interest will, if possible, be scheduled for payment after the facility is operational and has begun to generate income. However, the first full installment must be due and payable within 3 years from the date of the promissory note and be paid at least annually thereafter. In cases where there is an interest-only period, interest will be paid at least annually from the date of the note. (e) There must be no “due-on-demand” clauses without cause. Regardless of any “due-on-demand” with cause provision in a lender's promissory note, the Agency must concur in any acceleration of the loan unless the basis for acceleration is monetary default. | |||||
| 7:7:15.1.19.2.5.2.7.19 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | §§ 4279.127-4279.130 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.2.7.2 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.102 Definitions and abbreviations. | RBS | The definitions and abbreviations in § 4279.2 are applicable to this subpart. | |||||
| 7:7:15.1.19.2.5.2.7.20 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.131 Credit quality. | RBS | [81 FR 36005, June 3, 2016, as amended at 83 FR 11634, Mar. 16, 2018] | The Agency will only guarantee loans that are sound and that have a reasonable assurance of repayment. The lender is responsible for conducting a financial analysis that involves the systematic examination and interpretation of information to assess a company's past performance, present condition, and future viability. The lender is primarily responsible for determining credit quality and must address all of the elements of credit quality in a comprehensive, written credit analysis, including capacity (sufficient cash flow to service the debt), collateral (assets to secure the loan), conditions (borrower, economy, and industry), capital (equity/net worth), and character (integrity of management), as further described in paragraphs (a) through (e) of this section. The lender's analysis is the central underwriting document and must be sufficiently detailed to describe the proposed loan and business situation and document that the proposed loan is sound. The lender's analysis must include a written discussion of repayment ability with a cash-flow analysis, history of debt repayment, borrower's management, necessity of any debt refinancing, and credit reports of the borrower, principals, and any parent, affiliate, or subsidiary. The lender's analysis must also include spreadsheets and discussion of the 3 years of historical balance sheets and income statements (for existing businesses) and 2 years of projected balance sheets, income statements, and cash flow statements, with appropriate ratios and comparisons with industrial standards (such as Dun & Bradstreet or the Risk Management Association). All data must be shown in total dollars and also in common size form, obtained by expressing all balance sheet items as a percentage of assets and all income and expense items as a percentage of sales. (a) Capacity/cash flow. The lender must make all efforts to ensure the borrower has adequate working capital or operating capital and to structure or restructure debt so that the borrower has adequate debt coverage and the … | ||||
| 7:7:15.1.19.2.5.2.7.21 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.132 Personal and corporate guarantees. | RBS | (a) Full, unconditional personal and/or corporate guarantees for the full term of the loan are required from those owning 20 percent or more interest in the borrower, where legally permissible, unless the Agency grants an exception. The Agency may grant an exception for existing businesses only when the lender requests it and documents to the Agency's satisfaction that collateral, equity, cash flow and profitability indicate an above-average ability to repay the loan. Partial guarantees for the full term of the loan at least equal to each owner's percentage of interest in the borrower times the loan amount may be required in lieu of full, unconditional guarantees when the guarantors' percentages equal 100 percent so that the loan is fully guaranteed. (b) When warranted by an Agency assessment of potential financial risk, the Agency may require the following: (1) Guarantees to be secured; (2) Guarantees of parent, subsidiaries, or affiliated companies owning less than a 20 percent interest in the borrower; and (3) Guarantees from persons whose ownership interest in the borrower is held indirectly through intermediate entities. (c) All personal and corporate guarantors must execute Form RD 4279-14, “Unconditional Guarantee,” and any guarantee form required by the lender. The Agency will retain the original, executed Form RD 4279-14. (1) Any amounts paid by the Agency on behalf of an Agency guaranteed loan borrower will constitute a Federal debt owed to the Agency by the guaranteed loan borrower. (2) Any amounts paid by the Agency pursuant to a claim by a guaranteed program lender will constitute a Federal debt owed to the Agency by a guarantor of the loan, to the extent of the amount of the guarantor's guarantee. (3) In all instances under paragraphs (c)(1) and (2) of this section, interest charges will be assessed in accordance with 7 CFR 1951.133. | |||||
| 7:7:15.1.19.2.5.2.7.22 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | §§ 4279.133-4279.135 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.2.7.23 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.136 Insurance. | RBS | The lender is responsible for ensuring that required insurance is maintained by the borrower. (a) Hazard. Hazard insurance with a standard clause naming the lender as mortgagee or loss payee, as applicable, is required for the life of the guaranteed loan. The amount must be at least equal to the replacement value of the collateral or the outstanding balance of the loan, whichever is the greater amount. (b) Life. The lender may require a collateral assignment of life insurance to insure against the risk of death of persons critical to the success of the business. When required, coverage must be in amounts necessary to provide for management succession or to protect the business. The Agency may require life insurance on key individuals for loans where the lender has not otherwise proposed such coverage. The cost of insurance and its effect on the applicant's working capital must be considered, as well as the amount of existing insurance that could be assigned without requiring additional expense. (c) Worker compensation. Worker compensation insurance is required in accordance with State law. (d) Flood. National flood insurance is required in accordance with applicable law. (e) Other. The lender must consider whether public liability, business interruption, malpractice, and other insurance is appropriate to the borrower's particular business and circumstances and must require the borrower to obtain such insurance as is necessary to protect the interests of the borrower, the lender, or the Agency. | |||||
| 7:7:15.1.19.2.5.2.7.24 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.137 Financial statements. | RBS | Except for audited financial statements required by § 4279.71, the lender will determine the type and frequency of submission of financial statements by the borrower and any guarantors. At a minimum, annual financial statements prepared by an accountant in accordance with GAAP are required, except for personal financial statements and cooperative stock purchase loans in accordance with § 4279.115(a) that do not have to be prepared in accordance with GAAP. However, if the loan amount exceeds $10 million or if circumstances warrant, the Agency may require annual audited financial statements. | |||||
| 7:7:15.1.19.2.5.2.7.25 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | §§ 4279.138-4279.143 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.2.7.26 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.144 Appraisals. | RBS | [81 FR 36005, June 3, 2016, as amended at 81 FR 54477, Aug. 16, 2016] | Lenders must obtain appraisals for real estate and chattel collateral when the value of the collateral exceeds $250,000, unless the chattel is newly-acquired equipment and the value is supported by a bill of sale. For collateral values under this threshold, lenders must follow their primary regulator's policies relating to appraisals and evaluations or, if the lender is not regulated, normal banking practices and generally accepted methods of determining value. Lenders must use the fair market value as established by the appraisal and discounting policies outlined in § 4279.131(b) to meet the discounted collateral coverage requirements of this subpart. Lenders are responsible for ensuring that appraisal values adequately reflect the actual value of the collateral. The Agency will require documentation that the appraiser has the necessary experience and competency to appraise the property in question. Appraisals must not be more than 1 year old, and a more recent appraisal may be requested by the Agency in order to reflect more current market conditions. For loan servicing purposes, an appraisal may be updated in lieu of a complete new appraisal when the original appraisal is more than 1 year old but less than 2 years old. Failure by the lender to follow these requirements will be considered not acting in a reasonably prudent manner. (a) All real property appraisals associated with Agency guaranteed loanmaking and servicing transactions must meet the requirements contained in the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) of 1989, and the appropriate guidelines contained in Standards 1 and 2 of the Uniform Standards of Professional Appraisal Practices (USPAP) and be performed by a State Certified General Appraiser. Notwithstanding any exemption that may exist for transactions guaranteed by a Federal government agency, all appraisals obtained by the lender for loanmaking and servicing must conform to the Interagency Appraisal and Evaluations Guidelines established by the lender's primary … | ||||
| 7:7:15.1.19.2.5.2.7.27 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | §§ 4279.145-4279.149 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.2.7.28 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.150 Feasibility studies. | RBS | A feasibility study, by a qualified independent consultant acceptable to the Agency, is required for new businesses. The Agency may require a feasibility study for existing businesses when the project will significantly affect the borrower's operations, and cash flow from the existing facility is not sufficient to service the new debt. At a minimum, a feasibility study must include an evaluation of the economic, market, technical, financial, and management feasibility and an executive summary that reaches an overall conclusion as to the business' chance of success. The income approach of an appraisal is not an acceptable feasibility study. | |||||
| 7:7:15.1.19.2.5.2.7.29 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | §§ 4279.151-4279.160 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.2.7.3 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.103 Exception authority. | RBS | Section 4279.15 applies to this subpart. | |||||
| 7:7:15.1.19.2.5.2.7.30 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.161 Filing preapplications and applications. | RBS | [81 FR 36005, June 3, 2016, as amended at 89 FR 34958, May 1, 2024] | Borrowers and lenders are encouraged to file preapplications and obtain Agency comments before completing an application. However, if they prefer, borrowers and lenders may file a complete application without filing a preapplication. The Agency will neither accept nor process preapplications and applications unless a lender has agreed to finance the proposal. For borrowers other than individuals, a Unique Entity Identifier (UEI) is required. Instructions for obtaining the UEI are available at https://sam.gov/. Guaranteed loans exceeding $600,000 must be submitted under the requirements specified in paragraph (b) of this section. However, guaranteed loans of $600,000 and less may be submitted under the requirements of either paragraph (b) or (c) of this section. (a) Preapplications. Lenders may file preapplications by submitting the following to the Agency: (1) A letter or preliminary lender credit analysis, signed by the lender, containing the following: (i) Name of the proposed borrower, organization type, address, contact person, Federal tax identification number, email address, and telephone number; (ii) Name of the proposed lender, address, telephone number, contact person, email address, and lender's Internal Revenue Service (IRS) identification number; (iii) Amount of the loan request, percent of guarantee requested, and the proposed rates and terms; (iv) Description of collateral to be offered with estimated value(s) and the amount and source of equity to be contributed to the project; (v) A brief description of the project, products or services provided, and availability of raw materials and supplies; and (vi) The number of current full-time equivalent jobs, the number of jobs to be created as a result of the proposed loan, and the overall average wage rate. (2) The borrower's current (not more than 90 days old) balance sheet and year-to-date income statement. For existing businesses, also include balance sheets and income statements for the last 3 years; and (3) A completed Form RD 4279-2, … | ||||
| 7:7:15.1.19.2.5.2.7.31 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.162 Strategic economic and community development. | RBS | [85 FR 59395, Sept. 22, 2020] | Applicants with projects that support the implementation of Strategic Community Investment Plans are encouraged to review and consider 7 CFR part 1980, subpart K, which contains provisions for providing priority to projects that support the implementation of Strategic Community Investment Plans on a multi-jurisdictional and multi-sectoral basis. | ||||
| 7:7:15.1.19.2.5.2.7.32 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | §§ 4279.163-4279.164 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.2.7.33 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.165 Evaluation of application. | RBS | (a) General review. The Agency will evaluate the application and make a determination whether the borrower is eligible, the proposed loan is for an eligible purpose, there is reasonable assurance of repayment ability, there is sufficient collateral and equity, and the proposed loan complies with all applicable statutes and regulations. If the Agency determines it is unable to guarantee the loan, it will inform the lender in writing. (b) Environmental requirements. The environmental review process must be completed, in accordance with 7 CFR part 1970, “Environmental Policies and Procedures,” or successor regulation, prior to loan approval. | |||||
| 7:7:15.1.19.2.5.2.7.34 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.166 Loan priority scoring. | RBS | The Agency will consider applications and preapplications in the order they are received by the Agency; however, for the purpose of assigning priority points as described in paragraph (b) of this section, the Agency will compare an application to other pending applications that are competing for funding. The Agency may establish a minimum loan priority score to fund projects from the National Office reserve and will publish any minimum loan priority score in a notice published in the Federal Register . (a) When applications on hand otherwise have equal priority, the Agency will give preference to applications for loans from qualified veterans. (b) The Agency will assign priority points on the basis of the point system contained in this section. The Agency will use the application and supporting information to determine an eligible proposed project's priority for available guarantee authority. To the extent possible, all lenders must consider Agency priorities when choosing projects for guarantee. The lender must provide necessary information related to determining the score, if requested. (1) Population priority. Projects located in an unincorporated area or in a city with a population under 25,000 (10 points). (2) Demographics priority. The priority score for demographics priority will be the total score for the following categories: (i) Located in an eligible area of long-term population decline according to the last three decennial censuses (5 points); (ii) Located in a rural county that has had 20 percent or more of its population living in poverty based on the last three decennial censuses (10 points); (iii) Located in a rural community that is experiencing trauma as a result of natural disaster (5 points); (iv) Located in a city or county with an unemployment rate 125 percent of the Statewide rate or greater (5 points); (v) Located within the boundaries of a Federally recognized Indian tribe's reservation, within tribal trust lands, or within land owned by an Alaska Native Regional or Village … | |||||
| 7:7:15.1.19.2.5.2.7.35 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.167 Planning and performing development. | RBS | (a) Design policy. The lender must ensure that all facilities constructed with program funds are designed, and costs estimated, by an independent professional, utilizing accepted architectural, engineering, and design practices. The Agency may require an independent professional architect on complex projects. The lender must ensure the design conforms to applicable Federal, State, and local codes and requirements. The lender must also ensure that the project will be completed with available funds and, once completed, will be used for its intended purpose and produce in the quality and quantity proposed in the completed application approved by the Agency. Once construction is completed, the lender must provide the Agency with a copy of the Notice of Completion or similar document issued by the relevant building jurisdiction. (b) Issuing the Loan Note Guarantee prior to project completion. If the lender requests that the Loan Note Guarantee be issued prior to construction or completion of a project, the lender must have a construction monitoring plan acceptable to the Agency and undertake the added responsibilities set forth in this paragraph. The lender must monitor the progress of construction and undertake the reviews and inspections necessary to ensure that construction conforms to applicable Federal, State, and local code requirements; proceeds are used in accordance with the approved plans, specifications, and contract documents; and that funds are used for eligible project costs. The lender must expeditiously report any problems in project development to the Agency. (1) In cases of takeout of interim financing where the Loan Note Guarantee is issued prior to construction or completion of a project, the promissory note must contain the terms and conditions of the interim financing and the permanent financing and convert the interim financing to the permanent note as the Loan Note Guarantee can only be placed on one note. (2) Prior to disbursement of construction funds, the lender must have: (i) A comp… | |||||
| 7:7:15.1.19.2.5.2.7.36 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.168 Timeframe for processing applications. | RBS | All complete guaranteed loan applications will be approved or disapproved within 60 days, unless approval is prevented by a lack of guarantee authority or there are delays resulting from public comment requirements of the environmental assessment or outstanding DOL clearance issues. | |||||
| 7:7:15.1.19.2.5.2.7.37 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | §§ 4279.169-4279.172 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.2.7.38 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.173 Loan approval and obligating funds. | RBS | (a) Upon approval of a loan guarantee, the Agency will issue a Conditional Commitment to the lender, containing conditions under which a Loan Note Guarantee will be issued. No Conditional Commitment can be issued until the loan is obligated. If a Loan Note Guarantee is not issued by the Conditional Commitment expiration date, the Conditional Commitment may be extended at the request of the lender and only if there has been no material adverse change in the borrower or the borrower's financial condition since issuance of the Conditional Commitment. If the Conditional Commitment is not accepted, the Conditional Commitment may be withdrawn and funds may be deobligated. Likewise, if the Conditional Commitment expires, funds may be deobligated. (b) If certain conditions of the Conditional Commitment cannot be met, the lender and borrower may request changes to the Conditional Commitment. Within the requirements of the applicable regulations and prudent lending practices, the Agency may negotiate with the lender and the borrower regarding any proposed changes to the Conditional Commitment. Any changes to the Conditional Commitment must be documented by written amendment to the Conditional Commitment. (c) The borrower must comply with all Federal requirements then in effect for receiving Federal assistance. | |||||
| 7:7:15.1.19.2.5.2.7.39 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.174 Transfer of lenders. | RBS | (a) The Agency may approve the substitution of a new eligible lender in place of a former lender who has been issued and has accepted an outstanding Conditional Commitment when the Loan Note Guarantee has not yet been issued, provided that there are no changes in the borrower's ownership or control, loan purposes, or scope of project, and the loan terms and conditions in the Conditional Commitment and the loan agreement remain the same. Any request for a transfer of lender must be submitted in writing by the current lender, the proposed lender, and the borrower. The original lender must state the reason(s) it no longer desires to be the lender for the project. (b) Unless the new lender is already an approved lender, the Agency will analyze the new lender's servicing capability, eligibility, and experience prior to approving the substitution. The substituted lender must execute a new part B of Form 4279-1, “Application for Loan Guarantee;” Form RD 4279-4, “Lender's Agreement” (unless a valid Lender's Agreement with the Agency already exists); and complete a new lender's analysis in accordance with § 4279.131. The new lender may also be required to provide other updated application items outlined in § 4279.161(b). | |||||
| 7:7:15.1.19.2.5.2.7.4 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.104 Appeals. | RBS | Section 4279.16 applies to this subpart. | |||||
| 7:7:15.1.19.2.5.2.7.40 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | §§ 4279.175-4279.179 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.2.7.41 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.180 Changes in borrower. | RBS | Any changes in borrower ownership or organization prior to the issuance of the Loan Note Guarantee must meet the eligibility requirements of the program and be approved by the Agency. | |||||
| 7:7:15.1.19.2.5.2.7.42 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.181 Conditions precedent to issuance of the Loan Note Guarantee. | RBS | (a) The lender must not close the loan until all conditions of the Conditional Commitment are met. When loan closing plans are established, the lender must notify the Agency. Coincident with, or immediately after loan closing, the lender must provide the following to the Agency: (1) An executed Form RD 4279-4, unless a valid Lender's Agreement exists that was issued after August 2, 2016; (2) Form RD 1980-19 and appropriate guarantee fee; (3) Copy of the executed promissory note(s); (4) Copy of the executed loan agreement; (5) Copy of the executed settlement statement; (6) Original, executed Forms RD 4279-14, as required; (7) Any other documents required to comply with applicable law or required by the Conditional Commitment. (8) Borrower's loan closing balance sheet, supporting paragraph (a)(9)(i) of the lender certification, demonstrating required tangible balance sheet equity; and (9) The lender's certification to each of the following certifications: (i) The capital/equity requirement was determined, based on a balance sheet prepared in accordance with GAAP, and met, as of the date the guaranteed loan was closed, giving effect to the entirety of the loan in the calculation, whether or not the loan itself is fully advanced. (ii) All requirements of the Conditional Commitment have been met. (iii) No major changes have been made in the lender's loan conditions and requirements since the issuance of the Conditional Commitment, unless such changes have been approved by the Agency in writing. (iv) There is a reasonable prospect that the guaranteed loan and other project debt will be repaid on time and in full (including interest) from project cash flow according to the terms proposed in the application for loan guarantee. (v) All planned property acquisition has been or will be completed, all development has been or will be substantially completed in accordance with plans and specifications, conforms with applicable Federal, State, and local codes, and costs have not exceeded the amount approved by the… | |||||
| 7:7:15.1.19.2.5.2.7.43 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | §§ 4279.182-4279.186 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.2.7.44 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.187 Refusal to execute Loan Note Guarantee. | RBS | If the Agency determines that it cannot execute the Loan Note Guarantee, the Agency will promptly inform the lender of the reasons and give the lender a reasonable period within which to satisfy the objections. If the lender satisfies the objections within the time allowed, the Agency will issue the Loan Note Guarantee. If the lender requests additional time in writing and within the period allowed, the Agency may grant the request. | |||||
| 7:7:15.1.19.2.5.2.7.45 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | §§ 4279.188-4279.189 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.2.7.46 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.190 Business and Industry national COVID-19 Public Health Emergency Loans. | RBS | [85 FR 31040, May 22, 2020, as amended at 88 FR 82228, Nov. 24, 2023; 88 FR 86566, Dec. 14, 2023] | (a) Introduction. This section contains regulations for the Business and Industry National COVID-19 Public Health Emergency loan program (B&I CARES Act Program Loans). The purpose of the program is to provide loan guarantees under the authority of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Pub. L. 116-136). These B&I CARES Act Program Loans cover costs to prevent, prepare for, and respond to the coronavirus limited to the amount necessary to address the borrower's financial needs related to the COVID-19 Public Health Emergency. Consistent with the purposes of the CARES Act, the Agency has determined that the most effective use of these program funds is to support the cost of guaranteed loans to rural businesses to respond to the coronavirus. No B&I CARES Act Program Loan guarantee will be approved after September 30, 2021. All provisions of subparts A and B of this part and subpart B of part 4287 of this chapter apply to B&I CARES Act Program Loans, except as provided in this section. All forms used in connection with a B&I CARES Act Program Loan will be those used with other Business and Industry (B&I) loans, except as provided in this section. (b) Eligible borrowers. Section 4279.108 of this subpart applies to B&I CARES Act Program Loans. In addition, borrowers must have been in operation on February 15, 2020. (c) Eligible use of funds. (1) Purpose. The purpose of any B&I CARES Act Program Loan must be to cover costs to prevent, prepare for, and respond to the coronavirus pandemic, limited to the amount necessary to address the borrower's financial needs related to the COVID-19 Public Health Emergency, in accordance with paragraph (a) of this section. B&I CARES Act Program Loans should not exceed the amount needed to overcome the financial distress or related challenges caused by the COVID-19 Public Health Emergency. (2) Use of loan proceeds. Notwithstanding the provisions of § 4279.113, B&I CARES Act Program guaranteed loans will be limited to loans for working capital loa… | ||||
| 7:7:15.1.19.2.5.2.7.47 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | §§ 4279.191-4279.199 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.2.7.48 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.200 OMB control number. | RBS | In accordance with the Paperwork Reduction Act of 1995, the information collection requirements contained in this rule have been submitted to the Office of Management and Budget (OMB) under OMB Control Number 0570-0069 for OMB approval. | |||||
| 7:7:15.1.19.2.5.2.7.5 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | §§ 4279.105-4279.107 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.2.7.6 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.108 Eligible borrowers. | RBS | [81 FR 36005, June 3, 2016, as amended at 87 FR 38644, June 29, 2022] | (a) Type of entity. A borrower may be a cooperative organization, corporation, partnership, or other legal entity organized and operated on a profit or nonprofit basis; an Indian tribe on a Federal or State reservation or other federally recognized tribal group; a public body; or an individual. A borrower must be engaged in or proposing to engage in a business. A business may include manufacturing, wholesaling, retailing, providing services, or other activities that will provide employment and improve the economic or environmental climate. (b) Citizenship. Individual borrowers must be citizens of the United States or reside in the United States after being legally admitted for permanent residence. For purposes of this subpart, citizens and residents of the Republic of Palau, the Federated States of Micronesia, American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the Republic of the Marshall Islands are considered U.S. citizens. Individuals that reside in the United States after being legally admitted for permanent residence must provide a permanent green card as evidence of eligibility. Private entity borrowers must demonstrate, to the Agency's satisfaction, that loan funds will remain in the United States and the facility being financed will primarily create new or save existing jobs for rural U.S. residents. (c) Rural area. The business financed with a guaranteed loan under this subpart must be located in a rural area, except for cooperative organizations financed in accordance with § 4279.113(j)(2) and local foods projects financed in accordance with § 4279.113(y)(2). Loans to borrowers with facilities located in both rural and non-rural areas will be limited to the amount necessary to finance the facility located in the eligible rural area, except for those cooperative organizations financed in accordance with § 4279.113(j)(2) and those local foods projects financed in accordance with § 4279.113(y)(2). (1) Rural areas are any area of a State other than a city or town that has a… | ||||
| 7:7:15.1.19.2.5.2.7.7 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | §§ 4279.109-4279.112 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.2.7.8 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.113 Eligible uses of funds. | RBS | [81 FR 36005, June 3, 2016, as amended at 85 FR 57084, Sept. 15, 2020] | Eligible uses of funds must be consistent with § 4279.101(b) and § 4279.108(a) and include, but are not limited to, the following: (a) Purchase and development of land, buildings, and associated infrastructure for commercial or industrial properties, including expansion or modernization. (b) Business acquisitions provided that jobs will be created or saved. A business acquisition is considered the acquisition of an entire business, not a partial stock acquisition in a business. (c) Leasehold improvements when the lease contains no reverter clauses or restrictive clauses that would impair the use or value of the property as security for the loan. The term of the lease must be equal to or greater than the term of the loan. (d) Constructing or equipping facilities for lease to private businesses engaged in commercial or industrial operations. Financing for mixed-use properties, involving both commercial business and residential space, is authorized provided that not less than 50 percent of the building's projected revenue will be generated from business use. (e) Purchase of machinery and equipment. (f) Startup costs, working capital, inventory, and supplies in the form of a permanent working capital term loan. (g) Debt refinancing when it is determined that the project is viable and refinancing is necessary to improve cash flow and create new or save existing jobs. Debt being refinanced must be debt of the borrower reflected on its balance sheet. The lender's analysis must document that, except for the refinancing of lines of credit, the debt being refinanced was for an eligible loan purpose under this subpart. Except as provided for in paragraph (j)(3) of this section, existing lender debt may be included provided that, at the time of application, the loan being refinanced has been closed and current for at least the past 12 months (current status cannot be achieved by the lender forgiving the borrower's debt or servicing actions that impact the borrower's repayment schedule), and the lender is providing bet… | ||||
| 7:7:15.1.19.2.5.2.7.9 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | B | Subpart B—Business and Industry Loans | § 4279.114 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.3.10.17 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.220 General conditions of guarantee. | RBS | A loan guarantee under this part will be evidenced by a Loan Note Guarantee issued by the Agency. Each Lender will execute a Lender's Agreement. If a valid Lender's Agreement already exists, it is not necessary to execute a new Lender's Agreement with each loan guarantee. The provisions of this part and 7 CFR part 4287, subpart D will apply to all outstanding guarantees. In the event of a conflict between the guaranteed loan documents and these regulations as they exist at the time the documents are executed, the regulations will control. (a) Full faith and credit. (1) A guarantee under this subpart constitutes an obligation supported by the full faith and credit of the United States and is incontestable except for fraud or misrepresentation of which a Lender or Holder has actual knowledge at the time it becomes such Lender or Holder or which a Lender or Holder participates in or condones. (2) The guarantee will be unenforceable to the extent that any loss is occasioned by: (i) A provision for Interest on Interest, Default or penalty Interest, or late payment fees; (ii) The violation of usury laws; (iii) Use of loan proceeds for unauthorized purposes or to the extent that loan funds are used for purposes other than those specifically approved by the Agency in its Conditional Commitment; (iv) Failure to obtain or maintain the required security regardless of the time at which the Agency acquires knowledge thereof; and (v) Negligent Loan Origination or Negligent Loan Servicing unless otherwise determined under paragraph (d) of this section. (3) The Agency will guarantee payment as follows: (i) To any Holder, 100 percent of any loss sustained by the Holder on the guaranteed portion of the loan it owns and Interest through the Interest Termination Date due on such portion. (ii) To the Lender, subject to the provisions of this part and subpart D of part 4287 of this chapter, the lesser of: (A) Any loss sustained by the Lender on the guaranteed portion, including principal and Interest, through the Interest… | |||||
| 7:7:15.1.19.2.5.3.10.18 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.221 Rights and liabilities. | RBS | When a guaranteed portion of a loan is sold to a Holder, the Holder will succeed to all rights of the Lender under the Loan Note Guarantee to the extent of the portion purchased. (a) The Lender will remain bound to all obligations under the Loan Note Guarantee, Lender's Agreement, and the Agency Program regulations. (b) A guarantee and right to require purchase will be directly enforceable by a Holder notwithstanding any fraud or misrepresentation by the Lender or any unenforceability of the guarantee by the Lender, except for fraud or misrepresentation of which the Holder had actual knowledge at the time it became the Holder or in which the Holder participates or condones. (c) The Lender must reimburse the Agency for any payments the Agency makes to a Holder of Lender's guaranteed loan that, under the Loan Note Guarantee, would not have been paid to the Lender had the Lender retained the entire interest in the guaranteed loan and not conveyed an interest to a Holder. | |||||
| 7:7:15.1.19.2.5.3.10.19 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.222 Payments. | RBS | A Lender will receive all payments of principal and Interest on account of the entire loan and must promptly remit to the Holder its Pro Rata share of any payment within 30 days of the Lender's receipt thereof from the Borrower, determined according to its respective interest in the loan, less only the Lender's servicing fee. | |||||
| 7:7:15.1.19.2.5.3.10.20 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.223 Sale or assignment of guaranteed loan. | RBS | The Lender may Participate or sell all or part of the guaranteed portion of the loan or retain the entire loan. The Lender must fully disburse and properly close a loan prior to sale of any portion of the Promissory Note(s). The Lender cannot Participate or sell any amount of the guaranteed or unguaranteed portion of the loan to the Borrower or its parent, subsidiary or Affiliate or to officers, directors, stockholders, other owners, or members of their Immediate Families. The Lender cannot share any premium received from the sale of a guaranteed loan in the secondary market with a Loan Packager or other Loan Service Provider. The participating Lenders and Holders and the Borrower can have no rights or obligations to one another. If the Lender desires to market all or part of the guaranteed portion of the loan at or subsequent to loan closing, such loan must not be in Default. Lenders may use either the single Promissory Note or multi-note system as outlined in paragraphs (a) and (b) of this section. (a) Single note system. The entire loan is evidenced by one Promissory Note, and one Loan Note Guarantee is issued. When the loan is evidenced by one Promissory Note, the Lender may not at a later date cause any additional notes to be issued. (1) The Lender may assign all or part of the guaranteed portion of the loan to one or more Holders by using the Assignment Guarantee Agreement. The Lender must retain title to the Promissory Note. The Lender must complete and execute the Assignment Guarantee Agreement and return it to the Agency for execution prior to Holder execution. (2) A Holder, upon written notice to the Lender and the Agency, may reassign the unpaid guaranteed portion of the loan, in full, sold under the Assignment Guarantee Agreement. Holders may only reassign the guaranteed portion in the complete block they have received and cannot subdivide or further split the guaranteed portion of a loan or retain an Interest strip. (3) Upon notification and completion of the assignment through the use of the A… | |||||
| 7:7:15.1.19.2.5.3.10.21 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.224 Minimum retention. | RBS | The Lender is required to hold a minimum of 7.5 percent of the total loan amount. The amount required to be held must be of the unguaranteed portion of the loan and cannot be Participated to another Person. The Agency may reduce the minimum retention below 7.5 percent on a case by case basis when the Lender establishes to the Secretary's satisfaction that reduction of the minimum retention percentage is to meet compliance with the Lender's regulatory authority. The Lender must retain interest in the Collateral, and retain the servicing responsibilities for the guaranteed loan. | |||||
| 7:7:15.1.19.2.5.3.10.22 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.225 Repurchase from Holder. | RBS | (a) Repurchase by Lender. A Lender has the option to repurchase the unpaid guaranteed portion of the loan from a Holder within 30 days of written demand by the Holder when the Borrower is in Default not less than 60 days on principal or Interest due on the loan; or when the Lender has failed to remit to the Holder its Pro Rata share of any payment within 30 days of the Lender's receipt thereof from the Borrower. The repurchase by the Lender will be for an amount equal to the unpaid guaranteed portion of principal and accrued Interest less the Lender's servicing fee. The Holder must concurrently send a copy of the demand letter to the Agency. The Lender must accept an assignment without recourse from the Holder upon repurchase. The Lender is encouraged to repurchase the loan, upon written demand from the Holder, to facilitate the accounting of funds, resolve any loan problem, and resolve the Default, where and when reasonable. The benefit to the Lender is that it may re-sell the guaranteed portion of the loan in order to continue collection of its servicing fee if the Default is cured. The Lender must notify, in writing, the Holder and the Agency of its decision. (b) Agency repurchase. (1) The Lender's servicing fee will stop on the date that Interest was last paid by the Borrower when the Agency purchases the guaranteed portion of the loan from a Holder. The Lender cannot charge such servicing fee to the Agency and must apply all loan payments and Collateral proceeds received to the guaranteed and unguaranteed portions of the loan on a Pro Rata basis. (2) If the Agency repurchases 100 percent of the guaranteed portion of the loan, the Agency will not continue collection of the Annual Renewal Fee from the Lender. (3) If the Lender does not repurchase the unpaid guaranteed portion of the loan as provided in paragraph (a) of this section, the Agency will purchase from the Holder the unpaid principal balance of the guaranteed portion together with accrued Interest to date of repurchase or the Interest Terminat… | |||||
| 7:7:15.1.19.2.5.3.10.23 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.226 Replacement of document. | RBS | (a) The Agency may issue a replacement Loan Note Guarantee or Assignment Guarantee Agreement which was lost, stolen, destroyed, mutilated, or defaced to the Lender or Holder upon receipt of an acceptable certificate of loss and an indemnity bond. (b) When a Loan Note Guarantee or Assignment Guarantee Agreement is lost, stolen, destroyed, mutilated, or defaced while in the custody of the Lender or Holder, the Lender must coordinate the activities of the party who seeks the replacement documents and must submit the required documents to the Agency for processing. The requirements for replacement are as follows: (1) A certificate of loss, notarized and containing a jurat, which includes: (i) Name and address of owner; (ii) Name and address of the Lender of record; (iii) Capacity of Person certifying; (iv) Full identification of the Loan Note Guarantee or Assignment Guarantee Agreement including the name of the Borrower, the Agency's case number, date of the Loan Note Guarantee or Assignment Guarantee Agreement, face amount of the evidence of debt purchased, date of evidence of debt, present balance of the loan, percentage of guarantee, and, if an Assignment Guarantee Agreement, the original named Holder and the percentage of the guaranteed portion of the loan assigned to that Holder. Any existing parts of the document to be replaced must be attached to the certificate; (v) A full statement of circumstances of the loss, theft, destruction, defacement, or mutilation of the Loan Note Guarantee or Assignment Guarantee Agreement; and (vi) For the Holder, evidence demonstrating current ownership of the Loan Note Guarantee and Promissory Note or the Assignment Guarantee Agreement. If the present Holder is not the same as the original Holder, a copy of the endorsement of each successive Holder in the chain of transfer from the initial Holder to present Holder must be included. If copies of the endorsement cannot be obtained, best available records of transfer must be submitted to the Agency ( e.g., order confirmati… | |||||
| 7:7:15.1.19.2.5.3.10.24 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.227 Equal Credit Opportunity Act. | RBS | In accordance with the Equal Credit Opportunity Act (15 U.S.C. 1691, et seq. ), with respect to any aspect of a credit transaction, neither the Lender nor the Agency will discriminate against any applicant on the basis of race, color, religion, national origin, sex, marital status or age (providing the applicant has the capacity to contract), or because all or part of the applicant's income derives from a public assistance program, or because the applicant has, in good faith, exercised any right under the Consumer Protection Act. The Lender must comply with the requirements of the Equal Credit Opportunity Act as contained in the Federal Reserve Board's Regulation implementing that Act (see 12 CFR part 202) prior to loan closing. | |||||
| 7:7:15.1.19.2.5.3.10.25 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | §§ 4279.228-4279.230 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.3.11.26 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.231 Fees. | RBS | (a) Guarantee fee. The guarantee fee is paid to the Agency by the Lender and is nonrefundable. The fee may be passed on to the Borrower. Issuance of the Loan Note Guarantee is conditioned on payment of the guarantee fee by closing. The guarantee fee will be the percentage specified in paragraphs (a)(1) or (2) of this section, as applicable, unless otherwise specified by the Agency in a notice published in the Federal Register, multiplied by the principal loan amount multiplied by the percent of guarantee and will be paid one time only at the time the Loan Note Guarantee is issued. (1) For loans receiving a 90 percent guarantee, the guarantee fee is three percent. (2) For loans receiving less than a 90 percent guarantee, the guarantee fee is: (i) Two percent for guarantees on loans greater than 75 percent of total Eligible Project Costs. (ii) One and one-half percent for guarantees on loans of greater than 65 percent but less than or equal to 75 percent of total Eligible Project Costs. (iii) One percent for guarantees on loans of 65 percent or less of total Eligible Project Costs. (b) Annual Renewal Fee. The Annual Renewal Fee, which may be passed on to the Borrower, is paid by the Lender to the Agency for as long as the guarantee is outstanding and is payable during the construction period. (1) The amount of the annual renewal fee is calculated by the outstanding principal loan balance as of December 31 of each year multiplied by the Annual Renewal Fee rate, multiplied by the percent of guarantee. The rate is the rate in effect at the time the loan is obligated, and will remain in effect for the life of the loan. (2) The Annual Renewal Fee is paid once a year and is required to maintain the enforceability of the guarantee as to the lender. Annual Renewal Rees are due on January 31. Payments not received by April 1 are considered delinquent and, at the Agency's discretion, may result in cancellation of the guarantee to the lender. Holders' rights will continue in effect as specified in the Loan Note … | |||||
| 7:7:15.1.19.2.5.3.11.27 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.232 Guaranteed loan funding. | RBS | (a) The amount of a loan guaranteed for a Project under this subpart will not exceed 80 percent of total Eligible Project Costs. Total Federal participation will not exceed 80 percent of total Eligible Project Costs. The Borrower needs to provide the remaining 20 percent from non-Federal sources to complete the Project. Eligible Project Costs are specified in § 4279.210(d). If an eligible Borrower receives other direct Federal funding ( i.e., direct loans or grants) for a Project, the maximum amount of the loan that the Agency will guarantee under this subpart must be reduced by the same amount of the other direct Federal funding that the eligible Borrower received for the Project. For example, an eligible Borrower is applying for a loan guarantee on a $100,000,000 Project. If the Borrower receives no other direct Federal funding for this Project and requests an $80,000,000 guaranteed loan, the Agency will consider a guarantee on the $80,000,000. However, if this Borrower receives $10,000,000 in other direct Federal funding for this Project, the Agency will only consider a guarantee on $70,000,000. (b) The maximum principal amount of a loan guaranteed under this subpart is $250 million to one Borrower; there is no minimum amount. (c) The maximum guarantee on the principal and Interest due on a loan guaranteed under this subpart will be determined as specified in paragraphs (c)(1) through (4) of this section. (1) If the loan amount is equal to or less than $125 million, 80 percent for the entire loan amount unless all of the conditions specified in paragraphs (c)(1)(i) through (iii) of this section are met, in which case 90 percent for the entire loan amount. (i) Total Federal participation, sum of the amount of the loan requested and other direct Federal funding, must not be greater than 60 percent of total Eligible Project Costs; (ii) Feedstock and Off-Take Agreements of at least 1 year in duration; and (iii) Total of revenues from tax credits, carbon credits, or other Federal or State subsidies cannot be… | |||||
| 7:7:15.1.19.2.5.3.11.28 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.233 Interest rates. | RBS | The Interest rate for the guaranteed loan will be negotiated between the Lender and the Borrower and may be either fixed or variable, or a combination thereof, as long as it is a legal rate. Interest rates will not be more than those rates the Lender customarily charges Borrowers for non-guaranteed loans in similar circumstances in the ordinary course of business and are subject to Agency review and approval. Lenders are encouraged to utilize the secondary market and pass Interest-rate savings on to the Borrower. (a) A variable Interest rate must be a rate that is tied to a published base rate. The variable Interest rate must be specified in the Promissory Note and may be adjusted at specified intervals during the term of the loan, but the adjustments may not be more often than once each Calendar Quarter. The Lender must incorporate, within the variable rate Promissory Note at loan closing, the provision for adjustment of payment installments. The Lender must properly amortize the outstanding principal balance within the prescribed loan maturity in order to eliminate the possibility of a balloon payment at the end of the loan. (b) Any change in the base rate or fixed Interest rate between issuance of the Conditional Commitment and the issuance of the Loan Note Guarantee must be approved by the Agency. Approval of such a change must be shown as an amendment to the Conditional Commitment and must be reflected on the Guaranteed Loan Closing Report. (c) It is permissible to have different Interest rates on the guaranteed and unguaranteed portions of the loan. | |||||
| 7:7:15.1.19.2.5.3.11.29 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.234 Terms of loan. | RBS | The loan terms, other than Interest, must be the same for both the guaranteed and unguaranteed portions of the loan. (a) The repayment term for a loan under this subpart will be no greater than the lesser of 20 years from the date of loan closing or the useful life of the Project, as determined by the Lender and confirmed by the Agency. Both the guaranteed and unguaranteed portions of the loan must be amortized over the same term. (b) A loan's maturity will take into consideration the use of proceeds, the useful life of assets being financed, and the Borrower's ability to repay the loan. (c) The first installment of principal and Interest will, if possible, be scheduled for payment after the Project is operational and has begun to generate income. However, the first full installment must be due and payable within three years from the date of the Promissory Note and be paid at least annually thereafter. In cases where there is an Interest-only period, Interest will be paid at least annually from the date of the Promissory Note. (d) Only loans that require a periodic payment schedule that will retire the debt over the term of the loan without a balloon payment will be guaranteed except the final payment may be the funds held in the debt service reserve account. | |||||
| 7:7:15.1.19.2.5.3.11.30 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.235 Collateral. | RBS | The Lender is responsible for obtaining and maintaining proper and adequate Collateral to protect the interest of the Lender, the Holder, and the Agency. Collateral must be of such a nature that repayment of the loan is reasonably ensured when considered with the integrity and ability of Project management, soundness of the Project, and the Borrower's prospective earnings. The Collateral may include, but is not limited to, the following: Revenue, land, easements, rights-of-way, buildings, machinery, equipment, inventory, accounts receivable, contracts, cash, or other accounts, licenses and assignments of leases or leasehold interest. (a) The entire loan, the guaranteed and unguaranteed portions, must be secured by a first lien on all assets of the Project including all assets in the Project budget. The Agency may consider a subordinate lien position on inventory and accounts receivable to Working Capital loans including revolving lines of credit provided the Agency determines the Working Capital is necessary for the operation and with the Subordination, the loan remains adequately secured. (b) The entire loan must be secured by the same security with equal lien priority for the guaranteed and unguaranteed portions of the loan. The unguaranteed portion of the loan will neither be paid first nor given any preference or priority over the guaranteed portion. | |||||
| 7:7:15.1.19.2.5.3.11.31 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | §§ 4279.236-4279.242 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.3.11.32 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.243 Insurance. | RBS | The Lender is responsible for ensuring that required insurance is maintained by the Borrower. The Lender must be shown as an additional insured on insurance policies (or other risk sharing instruments) that benefit the Project and must be able to assume any contracts that are material to the Project, including any feedstock or Off-Take Agreements, as may be applicable. (a) Hazard. Hazard insurance with a standard clause naming the Lender as mortgagee or loss payee, as applicable, is required for the life of the guaranteed loan. The amount must be at least equal to the replacement value of the Collateral or the outstanding balance of the loan, whichever is the greater amount. (b) Life. The Lender may require as Collateral an assignment of life insurance to insure against the risk of death of persons critical to the success of the business. When required, coverage must be in amounts necessary to provide for management succession or to protect the business. The Agency may require life insurance on key individuals for loans where the Lender has not otherwise proposed such coverage. The cost of insurance and its effect on the applicant's Working Capital must be considered as well as the amount of existing insurance that could be assigned without requiring additional expense. (c) Worker compensation. Worker compensation insurance is required in accordance with State law. (d) Flood. National flood insurance is required in accordance with applicable law. (e) Other. The Lender must consider whether public liability, business interruption, malpractice, and other insurance is appropriate to the Borrower's particular business and must require the Borrower to obtain such insurance as is necessary to protect the interests of the Borrower, the Lender, or the Agency. | |||||
| 7:7:15.1.19.2.5.3.11.33 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.244 Appraisals. | RBS | (a) Lenders must obtain appraisals for real estate when the value of the Collateral exceeds $250,000. Each appraisal must be reported in a manner that summarizes all of the information necessary for the intended users to understand the report and contain all information pertinent to the appraiser's opinions and conclusions. (1) Appraisals must not be more than one year old, and a more recent appraisal may be requested by the Agency in order to reflect more current market conditions. For loan servicing purposes, an appraisal may be updated in lieu of a complete new appraisal when the original appraisal is more than one year old, but less than two years old. (2) Specialized appraisers will be required to complete appraisals under this section. The Agency may approve a waiver of this requirement only if a specialized appraiser does not exist in a specific industry. The Agency will require documentation that the appraiser has the necessary experience and competency to appraise the property in question. (3) All real property appraisals associated with Agency guaranteed loan origination and servicing transactions must meet the requirements contained in the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) of 1989 and the appropriate guidelines contained in Standards 1 and 2 of the Uniform Standards of Professional Appraisal Practices (USPAP) and be performed by a State Certified General Appraiser. Notwithstanding any exemption that may exist for transactions guaranteed by a Federal Government agency, all appraisals obtained by the Lender for origination and servicing must conform to the Interagency Appraisal and Evaluations Guidelines established by the Lender's primary Federal or State regulator. (4) All appraisals must include consideration of the potential effects from a release of hazardous substances or petroleum products or other environmental hazards on the Market Value of the Collateral. The Lender must complete and submit its technical review of the appraisal. For construction Projects, … | |||||
| 7:7:15.1.19.2.5.3.11.34 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.245 Personal and corporate guarantees. | RBS | (a) Unconditional personal and corporate guarantees are required for the full term of the loan from Persons owning 20 percent or greater interest in the borrower. (b) When warranted by an Agency assessment and its credit evaluation, guarantees may also be required of parent, subsidiaries, affiliated companies, Persons owning less than a 20 percent interest in the borrower, or Persons whose ownership interest in the Borrower is held indirectly through intermediate entities. (c) The Agency may require the guarantees to be secured. (d) Partial guarantees and exemptions to the requirement for guarantees may be requested by the Lender and are subject to concurrence by the Agency approval official on a case-by-case basis when warranted by an Agency assessment and its credit evaluation in accordance with § 4279.215(b). If partial guarantees are required, the partial guarantee will be at least equal to each owner's percentage of interest in the Borrower multiplied by the loan amount. (e) All personal and corporate guarantors must execute Form RD 4279-14, “Unconditional Guarantee,” and any guarantee form required by the Lender. The Agency will retain the original, executed Form RD 4279-14. (1) Any amounts paid by the Agency on behalf of an Agency Borrower will constitute a Federal Debt owed to the Agency by the Borrower. (2) Any amounts paid by the Agency pursuant to a claim by a Lender will constitute a Federal Debt owed to the Agency by a guarantor of the loan, to the extent of the amount of the guarantor's guarantee. (3) In all instances under paragraphs (c)(1) and (2) of this section, Interest charges will be assessed at the Promissory Note Interest rate on the date a loss claim is paid. | |||||
| 7:7:15.1.19.2.5.3.11.35 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | §§ 4279.246-4279.255 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.3.11.36 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.256 Construction planning and performing development. | RBS | The Lender and Borrower must comply with paragraphs (a) through (i) of this section. The Lender may contract for services and may rely on certain written materials and other reports to be provided by an independent engineer and other qualified third parties. (a) Design policy. The Lender must monitor and require the Borrower ensure that all facilities constructed with Program funds are designed, and costs estimated, by an independent professional utilizing accepted architectural, engineering, and design practices and conform to applicable Federal, State, and local codes and requirements. (b) Project control. (1) The Lender must monitor the progress of construction and confirm the reviews and inspections necessary to ensure that construction conforms to applicable Federal, State, and local code requirements have been performed; proceeds are used in accordance with the approved plans, specifications, and contract documents; and that loan funds are used for Eligible Project Costs in accordance with the purposes approved by the Agency in its Conditional Commitment. The Lender must expeditiously report any problems in Project development to the Agency. (2) The Lender must ensure an onsite Project inspector or independent engineer monitors the Project. (3) The Lender must monitor the Project to confirm that the Project will be completed with available funds and, once completed, will be used for its intended purpose and produce products in the quality and quantity proposed in the completed application approved by the Agency. Once construction is completed, the Lender must provide the Agency with a copy of the notice of completion. (4) Prior to the disbursement of construction funds, the Lender shall: (i) Have on file the major drawings issued for construction and major equipment specifications issued for procurement; (ii) Have a detailed timetable for the Project with a corresponding budget of costs, setting forth the parties responsible for payment; (iii) Ensure that the independent engineer confirms that t… | |||||
| 7:7:15.1.19.2.5.3.11.37 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | §§ 4279.257-4279.258 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.3.11.38 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.259 Borrower responsibilities. | RBS | (a) Federal, State, and local regulations. Borrowers must comply with all Federal, State, and local laws and rules that are in existence and that affect the Project including, but not limited to: (1) Land use zoning; (2) Health, safety, and sanitation standards as well as design and installation standards; and (3) Protection of the environment and consumer affairs. (b) Permits, agreements, and licenses. Borrowers must obtain all permits, agreements, and licenses that are applicable to the Project. (c) Insurance. The Borrower is responsible for maintaining all hazard, flood, liability, worker compensation, and personal life insurance, when required, for the Project. (d) Access to Borrower's records. Except as provided by law, upon request by the Agency, the Borrower will permit representatives of the Agency (or other Federal agencies as authorized by the Agency) to inspect and make copies of any of the records of the Borrower's Project. Such inspection and copying may be made during regular office hours of the Borrower or at any other time agreed upon between the Borrower and the Agency. (e) Access to the Project. The Borrower must allow the Agency access to the Project and its performance information until the loan is repaid in full and permit periodic inspections of the Project by a representative of the Agency. | |||||
| 7:7:15.1.19.2.5.3.12.39 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.260 Guarantee applications—general. | RBS | (a) Application submittal. (1) For each guarantee request, the Lender or the Borrower must submit to the Agency a non-binding letter of intent to apply for loan guarantee not less than 30 calendar days prior to the application deadline as provided in paragraph (b) of this section. The letter must identify the Borrower, the Lender and Project sponsors; describe the Project and Project location; describe the proposed feedstock, primary technologies of the facility and primary products produced; estimate the Total Project Cost and amount of loan requested; and any additional information specified in the annual Federal Register notice, if any. Applications that do not submit a letter of intent may be accepted by the Agency at the Agency's discretion. (2) For each guarantee request, the Lender must submit to the Agency an application that is in conformance with § 4279.261. The methods of application submittal will be specified in the annual Federal Register notice. (b) Application deadline. Unless otherwise specified by the Agency in a notice published in the Federal Register, application deadlines are October 1 and April 1 of each year. Complete applications must be received by the Agency on or before April 1 of each year to be considered for funding for that fiscal year. If the application deadline falls on a weekend or an observed holiday, the deadline will be the next Federal business day. The deadlines in this paragraph (b) relate to Phase 1 applications in accordance with § 4279.261. (c) Incomplete applications. Incomplete applications will be rejected. Lenders will be informed of the elements that made the application incomplete. If a resubmitted application is received by the applicable application deadline, the Agency will reconsider the application. (d) Application withdrawal. During the period between the submission of an application and closing, the Lender must notify the Agency, in writing, if the Project is no longer viable or the Borrower is no longer requesting financial assistance fo… | |||||
| 7:7:15.1.19.2.5.3.12.40 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.261 Application for loan guarantee content. | RBS | [80 FR 36425, June 24, 2015, as amended at 81 FR 11051, Mar. 2, 2016; 89 FR 34959, May 1, 2024] | Lenders must submit a complete application for each loan guarantee sought under this subpart. Components of an application are submitted in two phases. Phase I applications, which are the initial application submissions, must contain the information specified in paragraphs (a) through (j) of this section, organized pursuant to a table of contents in a chapter format. Phase 2 application components may be submitted after the Agency invites the Lender and Borrower to make the phase 2 submittal and must contain the information specified in paragraph (k) of this section. (a) Project Summary. Provide a concise summary of the proposed Project and application information, Project purpose and need, and Project goals, including the following: (1) Title. Provide a descriptive title of the Project. (2) Borrower eligibility. Describe how the Borrower meets the eligibility criteria identified in § 4279.209. (3) Project eligibility. Describe how the Project meets the eligibility criteria identified in § 4279.210. Clearly state whether the application is for the construction and development of a Biorefinery or for the Retrofitting of an existing facility. Additional Project description information will be needed later in the application process. (4) Project funds. Submit a Spreadsheet identifying sources, amounts, and availability of funds. The Spreadsheet must also include a directory of funds source contact information. Attach any applications, correspondence, or other written communication between Borrower and fund source. (5) Project timeline. A projected timeline detailing the timeline commencing with the loan application phase 1, including the loan application phase 2, final Project planning and engineering, obtaining required permits, loan closing, plant construction, commissioning and ramp up through stabilized state of operation. (b) Application form. Form RD 4279-1 or other Agency-approved application form if specified in a Federal Register notice. (c) Financial statements. (1) The most recen… | ||||
| 7:7:15.1.19.2.5.3.12.41 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | §§ 4279.262-4279.264 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.5.3.12.42 | 7 | Agriculture | XLII | 4279 | PART 4279—GUARANTEED LOANMAKING | C | Subpart C—Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Loans | § 4279.265 Guarantee application processing. | RBS | [80 FR 36425, June 24, 2015, as amended at 85 FR 29596, May 18, 2020] | (a) Eligibility determination. Upon receipt of a complete Phase 1 application, the Agency will determine if the Borrower, Lender, and Project are eligible and if the Project is technically and economically feasible, as provided under paragraph (b) of this section. (1) If the Borrower, Lender, or the Project is determined to be ineligible for any reason, the Agency will inform the Lender, in writing, of the reasons. No further evaluation of the application will occur. (2) If the Agency determines it is unable to guarantee the loan, the Agency will inform the Lender in writing. Such notification will include the reasons for denial of the guarantee. (b) Technical and economic feasibility. (1) The Agency's determination of a Project's technical and economic feasibility will be based on: (i) The Agency's analysis of the technical report and Feasibility Study submitted in the application conducted by qualified independent third parties; (ii) The Lenders credit evaluation; and (iii) Other application materials. (2) The Agency's determination of a Project's technical feasibility will be based on the technical report. In addition, prior to the issuance of the Conditional Commitment for a Project utilizing technology that does not have a history of successful utilization in a Commercial-scale operation of a Biorefinery that produces an Advanced biofuel, Renewable chemical, or Biobased product, evidence demonstrating 120 days of continuous, steady state production from an integrated demonstration unit must be provided by the Borrower to the Lender and the Agency for review and determination of technical feasibility. Authoritative demonstration campaign results must be provided in 30-day intervals. The integrated demonstration unit must prove out the Project's ability to utilize Project-relevant biomass and produce Advanced biofuel at a yield and quality consistent with the design basis of the Project. The Borrower must provide to the Agency, for review and approval, sufficient information on the integrated campai… |
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