Prudent Lending Practices [Business Credit and Assistance] Law and Legal Definition

According to 13 CFR 307.8 [Title 13 -- Business Credit and Assistance; Chapter III -- Economic Development Administration, Department of Commerce; Part 307 -- Economic Adjustment Assistance Investments; Subpart B -- Special Requirements for Revolving Loan Funds and Use of Grant Funds], Prudent Lending Practices means “generally accepted underwriting and lending practices for public loan programs, based on sound judgment to protect Federal and lender interests. Prudent Lending Practices include loan processing, documentation, loan approval, collections, servicing, administrative procedures, collateral protection and recovery actions. Prudent Lending Practices provide for compliance with local laws and filing requirements to perfect and maintain a security interest in RLF collateral.”