CFR > Title 7 - Agriculture > SUBTITLE B—Regulations of the Department of Agriculture > CHAPTER XLII—RURAL BUSINESS-COOPERATIVE SERVICE AND RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE (parts 4274 to 4290) > PART 4280—LOANS AND GRANTS > SUBPART B—Renewable Energy Systems and Energy Efficiency Improvements Program (§4280.101 to §4280.200) > 4280.125—Terms of loan.

4280.125—Terms of loan.

(a) The repayment term for a loan for:
(1) Real estate must not exceed 30 years;
(2) Machinery and equipment must not exceed 20 years, or the useful life, including major rebuilds and component replacement, whichever is less;
(3) Combined loans on real estate and equipment must not exceed 30 years; and
(4) Working capital loans must not exceed 7 years.
(b) The first installment of principal and interest will, if possible, be scheduled for payment after the project is operational and has begun to generate income.
(c) Payment terms must comply with § 4279.126(c) of this chapter.
(d) The maturity of a loan will be based on the use of proceeds, the useful life of the assets being financed, and the borrower's ability to repay.
(e) All loans guaranteed through this program must be sound, with reasonably assured repayment.
(f) Guarantees must be provided only after consideration is given to the borrower's overall credit quality and to the terms and conditions of renewable energy and energy efficiency subsidies, tax credits, and other such incentives.
(g) A principal plus interest repayment schedule is permissible.