§ 1948.109 - Loan purposes.

(a) Intermediaries. FmHA or its successor agency under Public Law 103-354 loan funds will be used by the intermediary to provide loans to ultimate recipients in accordance with paragraph (b) of this section. Prior to receiving FmHA or its successor agency under Public Law 103-354's concurrence to make a loan to an ultimate recipient, the intermediary must certify to FmHA or its successor agency under Public Law 103-354 that any assistance to the ultimate recipient, involving FmHA or its successor agency under Public Law 103-354-related funds, complies with the criteria in this section and § 1948.110 of this subpart.

(b) Ultimate recipients. (1) Financial assistance from the intermediary to the ultimate recipient must be for community development projects, the establishment of new businesses and/or the expansion of existing businesses, creation of employment opportunities and/or saving existing jobs. Additionally, the ultimate recipients must:

(i) Meet the objective and purpose of the program as described in § 1948.101(b) of this subpart,

(ii) To the maximum extent possible use labor of low-income persons, farm families, and displaced farm families needing additional income to supplement their farming operations, and

(iii) To the maximum extent possible be innovative in providing services and/or products for the public.

(2) Financial assistance involving FmHA or its successor agency under Public Law 103-354 loan funds from the intermediary to the ultimate recipient may include but not be limited to:

(i) Business acquisitions, construction, conversion, enlargement, repair, modernization, or developent cost.

(ii) Purchasing and development of land, easements, rights-of-way, building, facilities, leases, or materials.

(iii) Purchasing of equipment, leasehold improvements, machinery or supplies.

(iv) Pollution control and abatement.

(v) Transportation services.

(vi) Startup operating costs and working capital.

(vii) Interest (including interest on interim financing) during the period before the facility becomes income producing, but not to exceed 3 years.

(viii) Feasibility studies.

(ix) Reasonable fees and charges only as specifically listed in this subparagraph. Authorized fees include loan packaging fees, environmental data collection fees, and other professional fees rendered by professionals generally licensed by individual State or accreditation associations, such as Engineers, Architects, Lawyers, Accountants, and Appraisers. The amount of fee will be what is reasonable and customary in the community or region where the project is located. Any such fees are to be fully documented and justified as outlined in § 1948.116(b) of this subpart.

(x) Aquaculture including conservation, development, and utilization of water for aquaculture. Aquaculture means the culture or husbandary of aquatic animals or plants by private industry for commerical purposes including the culture and growing of fish by private industry for the purpose of granting or augmenting publicly-owned or regulated stocks of fish.