CFR > Title 7 - Agriculture > SUBTITLE B—Regulations of the Department of Agriculture > CHAPTER XVIII—RURAL HOUSING SERVICE, RURAL BUSINESS-COOPERATIVE SERVICE, RURAL UTILITIES SERVICE, AND FARM SERVICE AGENCY, DEPARTMENT OF AGRICULTURE (parts 1804 to 2045) > SUBCHAPTER H—PROGRAM REGULATIONS (parts 1900 to 1981) > PART 1980—GENERAL > SUBPART E—Business and Industrial Loan Program (§1980.401 to §1980.500) > 1980.420—Loan guarantee limits.

1980.420—Loan guarantee limits.

The percentage of guarantee, up to the maximum allowed by this section, is a matter of negotiation between the lender and FmHA or its successor agency under Public Law 103-354.
(a) For loans of $2 million or less, the maximum percentage of guarantee is 90 percent.
(b) For loans over $2 million but not over $5 million, the maximum percentage of guarantee is 80 percent.
(c) For loans in excess of $5 million, the maximum percentage of guarantee is 70 percent.
(d) Lenders and borrowers will propose the percentage of guarantee. FmHA or its successor agency under Public Law 103-354 informs lenders and borrowers in writing on Form FmHA or its successor agency under Public Law 103-354 449-14 of any percentage of guarantee less than proposed by the lender and borrower, and the reasons therefore. FmHA or its successor agency under Public Law 103-354 determines the percentage of guarantee after considering all credit factors involved, including but not limited to:
(1) Borrower's management. The borrower's management, and when appropriate, equity capital, history of operation, marketing plan, raw material requirements, and availability of necessary supporting utilities and services;
(2) Collateral. Collateral for the loan;
(3) Financial condition. Financial condition of borrower or borrower's principals, if appropriate;
(4) Lender's exposure. The lender's exposure before and after the loan, and any applicable limits on the lender's lending authority; and
(5) Trends and conditions. Current trends and economic conditions.

Code of Federal Regulations

[53 FR 40401, Oct. 17, 1988]