(a) For a Shipyard Project to receive financing, the Shipyard Project must result in a Shipyard modernization, or the financing must support increased productivity and meet the following requirements:

(1) The term for the financing will not exceed the reasonable economic useful life of the collective assets that comprise the Shipyard Project;

(2) There is sufficient collateral to secure the financing; and

(3) The persons identified within the Application including the shipyard owner, the operator of the shipyard, or other person identified in the application possess the necessary experience, ability, and other qualifications to operate properly the assets that comprise the Shipyard Project and will serve as security for the financing. For newly formed entities, MARAD will evaluate the performance of affiliates and/or companies associated with the management or principals (where the management or principals have a significant degree of control) in determining the Applicant's operating ability.

(b) [Reserved]