What can the subordination of FSA chattel security allow?

The subordination of FSA chattel security plays a critical role in allowing a borrower with a debt write down to obtain credit from another lender. When a borrower receives a debt write down, it typically reduces their overall debt obligation. However, to secure additional financing or loans from other lenders, the existing FSA loan needs to be subordinated.

Subordination essentially means that the FSA's claim on the chattel (personal property collateral) is placed behind the claims of other lenders. This is important because it assures new lenders that they will be able to collect on their loan before the FSA if the borrower defaults. Thus, by subordinating FSA chattel security, the borrower can effectively demonstrate to potential new lenders that their interests are protected, making it easier for them to acquire additional funds despite having undergone a debt write down.

This process is crucial in helping borrowers regain financial stability by accessing additional credit, which is often necessary in agriculture and farming operations.