Lender's credit evaluation

CFR · 2024-01-01 · US · Title 7

For each application, the lender must prepare a credit evaluation that is consistent with Agency standards found in this part. (a) (b) (1) (2) (i) Ensure that the borrower has adequate working capital, operating capital and reserves for capital expenditures, debt service, and maintenance as applicable; and (ii) Structure or restructure debt so the borrower has adequate debt coverage, documenting as applicable the necessity of any debt refinancing. The evaluation will be supported by a cash flow analysis. (3) (4) (i) The lender must determine the market value of collateral as established by an appraisal in accordance with § 5001.203. (ii) The lender should discount collateral consistent with sound loan-to-discounted value practices which must be adequate to secure the guaranteed loan in accordance with this section. To assess collateral adequacy and appropriate levels of discounting, the lender should give consideration to the type, quality, location, marketability, and alternative uses of the collateral and the basis for the valuation of the collateral, (5) (i) Availability and depth of resource/feedstock market, strength and duration of purchase agreements and availability of substitutes; (ii) Analysis of current and future market potential and off-take agreements, competition, type of project (service, product, or commodity based); (iii) Energy infrastructure, availability and dependability, transportation and other infrastructure, and environmental considerations; (iv) Tec

official document · source cfr-2024 · id 7:§ 5001.202