Common use of Debt Refinancing Clause in Contracts

Debt Refinancing. Lenders and FmHA or its successor agency under Public Law 103–354 must provide as part of their loan analysis the reasons for refinancing and the file must be documented accordingly. Refinancing debts may be allowed in connection with viable projects when it is deter- mined by the lender and FmHA or its successor agency under Public Law 103– 354 that it is necessary to create new or save existing jobs. FmHA or its suc- cessor agency under Public Law 103–354 will consider any lender’s exposure as it relates to this item and may adjust the guarantee percentage accordingly. Refinancing in accordance with this paragraph may be insured or ▇▇▇▇▇▇- ▇▇▇▇ only when: (i) It is necessary to spread substan- tial debt payment over a longer period of time thereby improving the busi- ness’ net cash flow and working capital position consistent with the useful life of the asset(s) being refinanced, or (ii) For payment of short-term debt when required in situations custom- arily financed over long periods of time (e.g., financing the purchase of real es- ▇▇▇▇, machinery, or equipment with short-term debt or cash expenditures, when lenders would not extend reason- able longer terms to the business), or (iii) It is necessary to place a perma- nent loan subsequent to an interim loan for financing the construction of the project.