[Code of Federal Regulations]
[Title 25, Volume 1]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 25CFR101.3]

[Page 294-295]
 
                            TITLE 25--INDIANS
 
     CHAPTER I--BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR
 
PART 101--LOANS TO INDIANS FROM THE REVOLVING LOAN FUND--Table of Contents
 
Sec. 101.3  Eligible borrowers under United States direct loan program.

    (a) Loans may be made from the revolving loan fund to Indians, 
eligible tribes and relending organizations, and corporations, 
cooperative associations and partnerships having a form of organization 
satisfactory to the Commissioner. Loans may be made to applicants only 
when, in the judgment of the Commissioner, there is a reasonable 
prospect of repayment. Loans may be made only to an applicant who, in 
the opinion of the Commissioner, is unable to obtain financing on 
reasonable terms and conditions from other sources such as tribal 
relending programs, banks, Farmers Home Administration, Small Business 
Administration, Production Credit Associations,

[[Page 295]]

or Federal Land Banks, and is also unable to obtain a guaranteed or 
insured loan pursuant to title II of the Indian Financing Act of 1974 
(88 Stat. 77). In addition, the applicant will be required to have 
equity equal to 20 percent of the total cost of a new enterprise, or 20 
percent of the total cost of expansion of an existing enterprise.
    (b) The establishment of a United States direct revolving loan 
program on a reservation(s) for making direct loans will require the 
approval of the Commissioner. All requests for establishing a United 
States direct revolving loan program on a reservation will be 
accompanied by reasons for need, estimate of financing needs, and other 
sources of financing available to meet the needs. The Commissioner, in 
approving a United States direct loan program, may require the 
preparation and approval of a plan of operation for conducting the 
program.
    (c) If local lending conditions and/or the information in an 
application for a loan indicate a probability that an applicant may be 
able to obtain the loan from other sources, the Commissioner, before 
approving a United States direct loan, will require the applicant to 
furnish letters from two customary lenders in the area who are making 
loans for similar purposes, stating whether or not they are willing to 
make a loan to the applicant for the same purposes and amount. If a 
customary lender will make the loan on reasonable terms and conditions, 
the Commissioner will not approve a United States direct loan.

[40 FR 3587, Jan. 23, 1975. Redesignated at 47 FR 13327, Mar. 30, 1982, 
as amended at 54 FR 34974, Aug. 23, 1989; 57 FR 46471, Oct. 8, 1992]