Corporations and businesses not at least 51 percent owned and controlled by U.S. citizens. Charitable and educational institutions, religious organizations and affiliated entities, and fraternal organizations. Loans to golf courses, gambling establishments, and race tracks. A minimum of 10 percent tangible balance sheet equity is required at the time of issuance of the Loan Note Guarantee. Twenty percent tangible balance sheet equity is required for new businesses.
Equity is developed in accordance with generally accepted accounting principles.
Feasibility studies are usually required. A one-time guarantee fee of 2 percent of the guaranteed principal amount is paid by the lender. A one percent fee may be allowed if the loan is for a high-impact business or is located in an economically distressed community. The borrower is additionally responsible for all closing costs, including attorney's fees, appraisals, etc. All collateral must secure the entire loan.