The amendment expands the list of permissible lenders under the Act.
The loan must be provided by:
1) Any commercial lender subject under law to loan-to-one borrower and affiliate transaction requirements (for example, banks and CoBank);
2) Any commercial lender, provided that the loan is not made to an affiliate of the lender and that all loans to the borrower and its affiliates do not exceed 10 percent of the net equity of the lender (i.e. non-bank lenders);
3) Any nonprofit corporation, including the Cooperative Finance Corporation (CFC), that is engaged primarily in commercial lending, provided that this lender has 1 or more issues of outstanding long-term debt that is rated within the 3 highest investment grade ratings (AA or higher) of a nationally recognized rating organization. If the Board determines that making the loan will cause the nonprofit corporation to fail to maintain this debt rating, the Board may disapprove the loan guarantee.
Also, no loan under this Act may be made by a governmental entity or an affiliate of a governmental entity, or government-sponsored enterprises (for example, Fannie Mae, Freddie Mac, the Federal Home Loan Banks), or any affiliates of such entities.
Finally, the loan must have terms that are consistent in material respects with the terms founds in the private capital markets.