§772.7. Leasing minor program loan security.
7 C.F.R. § 772.7
Eligibility. The Agency may consent to the borrower leasing all or a portion of security property for Minor Program loans to a third party when:
Leasing is the only feasible way to continue to operate the enterprise and is a customary practice;
The lease will not interfere with the purpose for which the loan was made;
The borrower retains ultimate responsibility for the operation, maintenance and management of the facility or service for its continued availability and use at reasonable rates and terms;
The lease prohibits amendments to the lease or subleasing arrangements without prior written approval from the Agency;
The lease terms provide that the Agency is a lienholder on the subject property and, as such, the lease is subordinate to the rights and claims of the Agency as lienholder; and
The lease is for less than 3 years and does not constitute a lease/purchase arrangement, unless the transfer and assumption provisions of this subpart are met.
Application. The borrower must submit a written request for Agency consent to lease the property.
Notes, amendments, and revision history
Authority
Authority: 5 U.S.C. 301, 7 U.S.C. 1989, and 25 U.S.C. 490.
Source
Source: 68 FR 69949, Dec. 16, 2003, unless otherwise noted.