### Question
What does distressed loan mean?


### Answer
**Distressed loan** has the following meaning in *12 U.S.C. § 2202a*:

> a loan that the borrower does not have the financial capacity to pay according to its terms and that exhibits one or more of the following characteristics:


(A) The borrower is demonstrating adverse financial and repayment trends

#### Citation:
  - *12 U.S.C. § 2202a*
  - Heading: **CHAPTER 23-FARM CREDIT SYSTEM > SUBCHAPTER IV-PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF INSTITUTIONS OF THE SYSTEM > Part C-Rights of Borrowers; Loan Restructuring**

