7 CFR §772.7

1. (a)Eligibility. The Agency may consent to the borrower leasing all or a portion of security property for Minor Program loans to a third party when:
   1. (1)Leasing is the only feasible way to continue to operate the enterprise and is a customary practice;
   2. (2)The lease will not interfere with the purpose for which the loan was made;
   3. (3)The borrower retains ultimate responsibility for the operation, maintenance and management of the facility or service for its continued availability and use at reasonable rates and terms;
   4. (4)The lease prohibits amendments to the lease or subleasing arrangements without prior written approval from the Agency;
   5. (5)The lease terms provide that the Agency is a lienholder on the subject property and, as such, the lease is subordinate to the rights and claims of the Agency as lienholder; and
   6. (6)The lease is for less than 3 years and does not constitute a lease/purchase arrangement, unless the transfer and assumption provisions of this subpart are met.
2. (b)Application. The borrower must submit a written request for Agency consent to lease the property.