[Code of Federal Regulations]
[Title 7, Volume 15]
[Revised as of January 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR4279.119]

[Page 575-576]
 
                          TITLE 7--AGRICULTURE
 
  CHAPTER XLII--RURAL BUSINESS-COOPERATIVE SERVICE AND RURAL UTILITIES 
                   SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 4279_GUARANTEED LOANMAKING--Table of Contents
 
                  Subpart B_Business and Industry Loans
 
Sec. 4279.119  Loan guarantee limits.

    (a) Loan amount. The total amount of Agency loans to one borrower, 
including the guaranteed and unguaranteed portions, the outstanding 
principal and interest balance of any existing Agency guaranteed loans, 
and new loan request, must not exceed $10 million. The Administrator 
may, at the Administrator's discretion, grant an exception to the $10 
million limit under the following circumstances:
    (1) The project to be financed is a high-priority project. Priority 
will be determined in accordance with the criteria contained in Sec. 
4279.155 of this subpart;
    (2) 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 
guarantee is not approved; and
    (3) Under no circumstances will the total amount of guaranteed loans 
to one borrower, including the guaranteed and unguaranteed portions, the 
outstanding principal and interest balance of any existing Agency 
guaranteed loans, and new loan request, exceed $25 million;
    (4) 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; and
    (5) Any request for a guaranteed loan exceeding the $10 million 
limit must be submitted to the Agency in the form of a preapplication. 
The preapplication must be submitted to the National Office for review 
and concurrence before encouraging a full application.
    (b) Percent 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

[[Page 576]]

million or less, 70 percent for loans between $5 and $10 million, and 60 
percent for loans exceeding $10 million. Notwithstanding the preceding, 
the Administrator may, at the Administrator's discretion, grant an 
exception allowing guarantees of up to 90 percent on loans of $10 
million or less under the following circumstances:
    (1) The project to be financed is a high-priority project. Priority 
will be determined in accordance with the criteria contained in 4279.155 
of this subpart;
    (2) 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 
higher guarantee percentage is not approved; and
    (3) The State Director may grant an exception for loans of up to 90 
percent on loans of $2 million or less subject to the State Director's 
delegated loan authority and meeting all of the conditions as set forth 
in this section. In cases where the State Director does not have the 
loan approval authority to approve a loan of $2 million or less or the 
proposed percentage, the case must be submitted to the National Office 
for review.
    (4) Each fiscal year, the Agency will establish a limit on the 
maximum portion of guarantee authority available for that fiscal year 
that may be used to guarantee loans with a guarantee percentage 
exceeding 80 percent. The limit will be announced by publishing a notice 
in the Federal Register. Once the limit has been reached, the guarantee 
percentage for all additional loans guaranteed during the remainder of 
that fiscal year will not exceed 80 percent.