US Legal Forms
Legal definitions
A
Administrative Cost of Issuing a Loan Guarantee

Understanding the Administrative Cost of Issuing a Loan Guarantee

Q: Who pays the administrative costs?

Typically, these costs are borne by the applicant as part of the loan guarantee process.

Q: Can I reduce administrative costs?

While some costs are unavoidable, being well-prepared can help streamline the application process and potentially reduce expenses.

Definition & Meaning

The administrative cost of issuing a loan guarantee refers to the total expenses incurred by the Department of Energy (DOE) during the entire process of evaluating and managing a loan guarantee. This includes:

Evaluating pre-applications and applications for a loan guarantee.
Offering a term sheet, executing a conditional commitment, and negotiating the loan guarantee agreement.
Servicing and monitoring the loan guarantee throughout various phases of the project, including construction, startup, commissioning, shakedown, and operational phases.

Table of content

Legal Use & context

This term is primarily used within the context of federal loan guarantees, particularly those related to innovative energy technologies. It is relevant in areas such as energy law, finance, and administrative law. Users may encounter forms and procedures related to loan guarantees, which can often be managed with the help of legal templates from US Legal Forms.

Key legal elements

Real-world examples

Here are a couple of examples of abatement:

Example 1: A renewable energy company applies for a loan guarantee from the DOE to fund a solar power project. The administrative costs include the evaluation of their application, negotiating the terms of the guarantee, and ongoing monitoring during the project's construction and operation.

Example 2: A startup seeking a loan guarantee for a new energy-efficient technology incurs administrative costs while working with the DOE to finalize the agreement and ensure compliance during the project's implementation. (hypothetical example)

Comparison with related terms

Term	Definition	Difference
Loan Guarantee	A promise by a third party to assume the debt obligation if the borrower defaults.	The administrative cost is a component of the overall loan guarantee process.
Administrative Expenses	General costs incurred in the operation of a business or organization.	Administrative costs specifically relate to the loan guarantee process.

Common misunderstandings

What to do if this term applies to you

If you are involved in a project that may require a loan guarantee, consider the following steps:

Gather all necessary documentation for your application.
Consult with a legal professional to understand the implications of administrative costs.
Explore US Legal Forms for templates that can assist in preparing your application and related documents.

Find the legal form that fits your case

Browse our library of 85,000+ state-specific legal templates.

This field is required

Quick facts

Typical Fees: Varies based on project size and complexity.
Jurisdiction: Federal, specifically under the Department of Energy.
Possible Penalties: Non-compliance with terms may result in loss of guarantee.