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Glossary term

Direct Loan

Definition

A direct loan is one made straight from a government agency, like the FSA, rather than through a bank.

Technical definition

A direct loan is credit originated and serviced by a government agency itself, with the agency acting as the lender of record.

Why it matters

Direct programs can reach borrowers underserved by commercial lenders. Availability, limits, and eligibility are set by the agency.

Example

When the FSA itself lends to and services a farmer's loan, that's a direct loan.

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