Section 764.51 - Loan application(a) A loan application must be submitted in the name of the actual operator of the farm. Two or more applicants applying jointly will be considered an entity applicant. The Agency will consider tax filing status and other business dealings as indicators of the operator of the farm.(b) A complete loan application, except as provided in paragraphs (c) through (f) of this section, will include: (1) The completed Agency application form;(2) If the applicant is an entity:(i) A complete list of entity members showing the address, citizenship, principal occupation, and the number of shares and percentage of ownership or stock held in the entity by each member, or the percentage of interest in the entity held by each member;(ii) A current financial statement from each member of the entity;(iii) A current financial statement from the entity itself;(iv) A copy of the entity's charter or any entity agreement, any articles of incorporation and bylaws, any certificate or evidence of current registration (good standing), and a resolution adopted by the Board of Directors or entity members authorizing specified officers of the entity to apply for and obtain the desired loan and execute required debt, security and other loan instruments and agreements;(v) In the form of married couples applying as a joint operation, items (i) and (iv) will not be required. The Agency may request copies of the marriage license, prenuptial agreement or similar documents as needed to verify loan eligibility and security. Items (ii) and (iii) are only required to the extent needed to show the individual and joint finances of the husband and wife without duplication.(3) A written description of the applicant's farm training and experience, including each entity member who will be involved in managing or operating the farm. Farm experience of the applicant, without regard to any lapse of time between the farm experience and the new application, may be included in the applicant's written description. If farm experience occurred more than 5 years prior to the date of the new application, the applicant must demonstrate sufficient on-the-job training or education within the last 5 years to demonstrate managerial ability;(4) The last 3 years of farm financial records, including tax returns, unless the applicant has been farming less than three years;(5) The last 3 years of farm production records, unless the applicant has been farming less than 3 years;(6) Except for CL, documentation that the applicant and each member of an entity applicant cannot obtain sufficient credit elsewhere on reasonable rates and terms, including a loan guaranteed by the Agency. The authorized Agency official will evaluate and document whether or not rates and terms of available credit in the applicant's region will result in a reasonable amount of cash flow margin to increase working capital reserves and savings, including reasonable savings for retirement and education, to support operational stability and growth;(7) Documentation of compliance with the Agency's environmental regulations contained in part 799 of this chapter;(8) Verification of all non-farm income;(9) A current financial statement and the operation's farm operating plan, including the projected cash flow budget reflecting production, income, expenses, and loan repayment plan;(10) A legal description of the farm property owned or to be acquired and, upon Agency request, any leases, contracts, options, and other agreements related to the operation;(11) Payment to the Agency for ordering a credit report on the applicant;(12) Verification of all debts;(13) Any additional information deemed necessary by the Agency to effectively evaluate the applicant's eligibility and farm operating plan;(14) For EM loans, a statement of loss or damage on the appropriate Agency form;(15) For CL only, a conservation plan or Forest Stewardship Management Plan as defined in § 761.2 of this chapter; and(16) For CL only, and if the applicant wishes to request consideration for priority funding, plans to transition to organic or sustainable agriculture when the funds requested will be used to facilitate the transition.(c) For an ML for OL purposes request, all of the following criteria must be met:(1) The loan requested for OL purposes is:(i) To pay annual or term operating expenses, and(ii) $50,000 or less and the applicant's total outstanding Agency OL debt at the time of loan closing will be $50,000 or less,(2) The applicant must submit the following:(i) Items (1), (2), (3), (6), (7), (9), and (11) of paragraph (b) of this section;(ii) Financial and production records for the most recent production cycle, if available, and practicable to project the cash flow of the operating cycle, and(iv) Verification of all non-farm income relied upon for repayment; and(3) The Agency may require an ML applicant to submit any other information listed in paragraph (b) of this section upon request when specifically needed to make a determination on the loan application.(d) For an ML request for FO purposes, all of the following criteria must be met: (1) The loan requested is: (i) To pay for any authorized purpose under the FO Program, which are specified in § 764.151 ; and(ii) $50,000 or less and the applicant's total outstanding Agency FO debt at the time of loan closing will be $50,000 or less,(2) The applicant must submit the following:(i) Items specified in paragraphs (b)(1), (2), (3), (6), (7), (9), (10), and (11) of this section;(ii) Financial and production records for the most recent production cycle, if available and practicable to project the cash flow of the operating cycle; and(iv) Verification of all non-farm income relied upon for repayment; and(v) Verification of applicant's farm experience;(3) The Agency may require an ML applicant to submit any other information listed in paragraph (b) of this section upon request when necessary to make a determination on the loan application.(e) For a CL Program streamlined application, the applicant must meet all of the following: (1) Be current on all payments to all creditors including the Agency (if currently an Agency borrower).(2) Have not received primary loan servicing on any FLP debt within the past 5 years.(3) Have a debt to asset ratio that is 40 percent or less.(4) Have a balance sheet that indicates a net worth of 3 times the requested loan amount or greater.(5) Have a FICO credit score from the Agency obtained credit report of at least 700. For entity applicants, the FICO credit score of the majority of the individual members of the entity must be at least 700.(6) Submit the following items:(i) Items specified in paragraphs (b)(1), (b)(2), (b)(3), (b)(7), (b)(11), (b)(15), and (b)(16) of this section,(ii) A current financial statement less than 90 days old, and(iii) Upon Agency request, other information specified in paragraph (b) of this section necessary to make a determination on the loan application.(f) For a youth loan request: (1) The applicant must submit items (1), (7), and (9) of paragraph (b) of this section.(2) Applicants 18 years or older, must also provide items (11) and (12) of paragraph (b) of this section.(3) The Agency may require a youth loan applicant to submit any other information listed in paragraph (b) of this section as needed to make a determination on the loan application.(g) The applicant need not submit any information under this section that already exists in the applicant's Agency file and is still current. 72 FR 63298 , Nov. 8, 2007, as amended at 75 FR 54015 , Sept. 3, 2010; 76 FR 75434 , Dec. 2, 2011; 77 FR 15938 , Mar. 19, 2012; 78 FR 3835 , Jan. 17, 2013; 79 FR 60744 , Oct. 8, 2014; 81 FR 3292 , Jan. 21, 2016; 81 FR 51284 , Aug. 3, 2016 81 FR 3292, 1/21/2016; 81 FR 51284, 8/3/2016; 89 FR 65039, 9/25/2024