1. (a) Reasonable risks. There must be reasonable assurance, in the judgment of the Authority, that the applicant has the willingness and ability to repay the loan according to its terms. In making this judgment the Authority may consider the following:

   1. (1) the applicant's business plan--how sound and comprehensive it is;
   2. (2) projected cash flow of the applicant;
   3. (3) commitments from other sources for funds necessary for the operation such as seasonal working capital;
   4. (4) collateral, guaranties, and/or insurance securing the loan;
   5. (5) the applicant's management ability, credit history and financial condition.
2. (b) Eligibility and/or certification of lenders. Institutions desiring to originate and service loans as lenders and/or participate in loans as lenders must demonstrate the continuing ability to evaluate, perform and service the loan; make the necessary reports as identified in the rules of the program; and to collect the loan, if requested by the Authority, upon default. The lender must agree to exercise due diligence in the servicing, maintenance, review and evaluation of performance without regard to the existence of participation by the Authority or any other limitation of risk.
3. (c) The Authority has adopted a Credit Policy and Procedures document which contains additional criteria and guidelines used by the Authority in the loan review and approval process. The Credit Policy and Procedure document is adopted by reference herein. Copies may be obtained from the Finance and Agribusiness Development Program, Texas Department of Agriculture, P.O. Box 12847, Austin, Texas 78711, (512) 475-1619.

Source Note:The provisions of this §24.11 adopted to be effective June 16, 1995, 20 TexReg 4047; amended to be effective July 1, 1996, 21 TexReg 5685; amended to be effective September 16, 1997, 22 TexReg 9243.