§ 1843. — Limitations and conditions of loan guarantees.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC1843]
TITLE 15--COMMERCE AND TRADE
CHAPTER 45--EMERGENCY LOAN GUARANTEES TO BUSINESS ENTERPRISES
Sec. 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.
(Pub. L. 92-70, Sec. 4, Aug. 9, 1971, 85 Stat. 178.)
