(a) Subject to paragraph (b) of this section, a lender may distribute the risk of a portion of a loan guaranteed under the program by sale of participations therein if:

Ask a legal question, get an answer ASAP!
Click here to chat with a lawyer about your rights.

(1) Neither the loan note nor the guarantee is assigned, conveyed, sold, or transferred in whole or in part;

(2) The lender remains solely responsible for the administration of the loan; and

(3) The Board’s ability to assert any and all defenses available to it under the guarantee and the law is not adversely affected.

(b) The following categories of entities may purchase participations in loans guaranteed under the program:

(1) Eligible lenders;

(2) Private investment funds and insurance companies that do not usually invest in commercial loans;

(3) Air Carrier company suppliers or customers, who are interested in participating as a means of commencing or solidifying the supplier or customer relationship with the borrower; or

(4) Any other entity approved by the Board on a case-by-case basis.