Overview
This section defines the core terminology used in FAR Subpart 32.3, establishing the framework for government-backed "V loans" designed to support national defense production.
Key Rules
- Borrower Scope: Includes contractors, subcontractors at any tier, or suppliers receiving a guaranteed loan.
- Guaranteed (V) Loans: Defined as financial arrangements under Regulation V where a federal agency commits to purchasing a specific percentage of a loan and sharing losses with the private lender.
- Guaranteeing Agency Authority: Only agencies specifically authorized by the President can guarantee these loans through Federal Reserve Banks.
- Regulatory Governance: These loans are specifically linked to the Board of Governors of the Federal Reserve System and Regulation V.
Practical Implications
- These definitions allow contractors and subcontractors who might not qualify for traditional commercial credit to obtain the necessary working capital to fulfill critical defense-related contracts.
- The inclusion of "at any tier" ensures that the entire supply chain, not just prime contractors, can access financial assistance for national defense production.