1. (a) Need for financial assistance. The Authority shall consider whether the desired project financing appears to be available to the applicant on reasonable terms from other lenders. The Authority may direct the applicant to other sources for coparticipation in the credit.

2. (b) Reasonable risks. There must be reasonable assurance, in the judgment of the Authority, that the financial assistance provided can and will be paid back according to its terms. In making this judgment the Authority may consider the following:

   1. (1) evidence of the manner, means, and security of payment by the applicant;
   2. (2) projected cash flow earnings of the applicant;
   3. (3) firm commitments from other independent and responsible financial sources for all other funds in excess of the financial assistance provided;
   4. (4) collateral and other sources of guaranties or insurance securing the financial assistance provided;
   5. (5) credit history and financial condition of the applicant;
   6. (6) historical financial statements of owners; and
   7. (7) the ability of the management of the project.
3. (c) Eligibility of lender. The lender originating an application to the financial assistance programs must have a continuing ability to evaluate, perform and service the loan; make the necessary reports as identified in the rules of the program; and 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. The Authority reserves the right to refuse to enter into an agreement with lenders which, in the judgment of the Authority, do not have the capacity or interest to appropriately make and service the loan.
4. (d) The Authority has adopted a Credit Policy and Procedures document which contains additional criteria and guidelines used by the Authority in the loan guaranty review and approval process. The Credit Policy and Procedure document is adopted by reference herein. Copies may be obtained from the Texas Agricultural Finance Authority, Texas Department of Agriculture, P.O. Box 12847, Austin, Texas 78711.

Source Note:The provisions of this §28.11 adopted to be effective April 23, 1991, 16 TexReg 2051; amended to be effective January 17, 1994, 19 TexReg 66; amended to be effective October 4, 1995, 20 TexReg 7596; amended to be effective July 1, 1996, 21 TexReg 5685; amended to be effective August 24, 1999, 24 TexReg 6472; amended to be effective September 28, 2005, 30 TexReg 6049; transferred effective October 1, 2007, as published in the Texas Register September 28, 2007, 32 TexReg 6793.