1. (a) Criteria for an eligible applicant. The board shall consider the following factors in deciding whether to approve an application for a loan guarantee:

   1. (1) the anticipated benefits from granting a loan guarantee to the eligible applicant, including both potential job creation and commercial benefits to the agricultural industry;

   2. (2) the eligible applicant's qualifications, including:

      1. (A) credit history and financial condition of the eligible applicant;
      2. (B) historical financial statements of the eligible applicant;
      3. (C) the management experience and ability of the eligible applicant;

   3. (3) the feasibility of the eligible applicant's plans, including:

      1. (A) evidence of the manner, means, and security for repayment of the loan by the eligible applicant;
      2. (B) the reasonableness and completeness of the plan;
      3. (C) the projected cash flow of the project;
      4. (D) the collateral and other sources of guaranty or insurance securing the loan; and
      5. (E) the existence of crop insurance and life insurance on the eligible applicant;
   4. (4) other funding sources available to the eligible applicant. The Authority shall consider whether the desired project financing appears to be available to the eligible applicant on reasonable terms from other lenders. The Authority may direct the eligible applicant to other sources for co-participation in the credit; and
   5. (5) any other factor or circumstance within statutory authority and reasonably related to the goals and objectives of the Act.
2. (b) Eligibility of the lender. The lender originating a loan must have a continuing ability to evaluate, perform, and service the loan; to 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. The Authority reserves the right to decline a loan guarantee to a lender which, in the judgment of the Authority, does not have the capacity or interest to appropriately make and service the loan.
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 guarantee 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 §30.12 adopted to be effective November 15, 1993, 18 TexReg 7539; amended to be effective July 1, 1996, 21 TexReg 5686; amended to be effective September 16, 1997, 22 TexReg 9243.