(a) A guarantee of a loan may be made under this Act 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 of 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) Loans guaranteed under this Act shall be payable in not more than five
years, but may be renewable for not more than an additional three
years.
(c) (1) Loans guaranteed under this Act 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 Act. 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.
[15 USC 1843.]
