[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: 25CFR103.16]

[Page 308]
 
                            TITLE 25--INDIANS
 
     CHAPTER I--BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR
 
PART 103--LOAN GUARANTY, INSURANCE, AND INTEREST SUBSIDY--Table of Contents
 
  Subpart B--How a Lender Obtains a Loan Guaranty or Insurance Coverage
 
Sec. 103.16  How does BIA approve or reject a loan guaranty or insurance application?

    (a) BIA reviews each guaranty or insurance application, and may 
evaluate each loan application independently from the lender. BIA bases 
its loan guaranty or insurance decisions on many factors, including 
compliance with this part, and whether there is a reasonable prospect of 
loan repayment from business cash flow, or if necessary, from 
liquidating loan collateral. Lenders are expected to obtain a first lien 
security interest in enough collateral to reasonably secure repayment of 
each loan guaranteed or insured under the Program, to the extent that 
collateral is available.
    (b) BIA approves applications by issuing an approval letter, 
followed by the procedures in Sec. 103.18. If the guaranty or insurance 
application is incomplete, BIA may return the application to the lender, 
or hold the application while the lender submits the missing 
information. If BIA denies the application, it will provide the lender 
with a written explanation, with a copy to the borrower.