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U.S. Code as of:
01/19/04
Section 1843. Limitations and conditions of loan guarantees
(a) Necessary findings
A guarantee of a loan may be made under this chapter only if -
(1) the Board finds that (A) the loan is needed to enable the
borrower to continue to furnish goods or services and failure to
meet this need would adversely and seriously affect the economy
of or employment in the Nation or any region thereof, (B) credit
is not otherwise available to the borrower under reasonable terms
or conditions, and (C) the prospective earning power of the
borrower, together with the character and value of the security
pledged, furnish reasonable assurance that it will be able to
repay the loan within the time fixed, and afford reasonable
protection to the United States; and
(2) the lender certifies that it would not make the loan
without such guarantee.
(b) Term of loans; renewal
Loans guaranteed under this chapter shall be payable in not more
than five years, but may be renewable for not more than an
additional three years.
(c) Interest rates, determination; guarantee fee
(1) Loans guaranteed under this chapter shall bear interest
payable to the lending institutions at rates determined by the
Board taking into account the reduction in risk afforded by the
loan guarantee and rates charged by lending institutions on
otherwise comparable loans.
(2) The Board shall prescribe and collect a guarantee fee in
connection with each loan guaranteed under this chapter. Such fee
shall reflect the Government's administrative expense in making the
guarantee and the risk assumed by the Government and shall not be
less than an amount which, when added to the amount of interest
payable to the lender of such loan, produces a total charge
appropriate for loan agreements of comparable risk and maturity if
supplied by the normal capital markets.
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