19 USC 2344 – Financial assistance
(a) Direct loans and guarantees of loans
The Secretary may provide to a firm, on such terms and conditions as he determines to be appropriate, such financial assistance in the form of direct loans or guarantees of loans as in his judgment will materially contribute to the economic adjustment of the firm. The assumption of an outstanding indebtedness of the firm, with or without recourse, shall be considered to be the making of a loan for purposes of this section.
(b) Allowable purposes
Terms Used In 19 USC 2344
- Recourse: An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Source: FDIC
Loans or guarantees of loans shall be made under this part only for the purpose of making funds available to the firm—
(1) for acquisition, construction, installation, modernization, development, conversion, or expansion of land, plant, buildings, equipment, facilities, or machinery, or
(2) to supply such working capital as may be necessary to enable the firm to implement its adjustment proposal.
(c) Limitation on direct loans
No direct loan may be provided to a firm under this part if the firm can obtain loan funds from private sources (with or without a guarantee) at a rate no higher than the maximum interest per annum that a participating financial institution may establish on guaranteed loans made pursuant to section 636(a) of title 15.
(d) Limitations on loans and guarantees
Notwithstanding any other provision of this part, no direct loans or guarantees of loans may be made under this part after April 7, 1986.