What is the maximum promissory note term for an initial direct operating loan to purchase a new combine?

The maximum promissory note term for an initial direct operating loan specifically designed for items such as a new combine is set at 7 years. This duration is significant as it aligns with the financial needs and expected lifespan of the equipment. A loan term of this length allows the borrower to manage cash flow effectively while ensuring that the loan is being repaid within a reasonable time frame that corresponds with the useful life of the combine.

Choosing a term longer than 7 years, like 10 or 15 years, would generally not be permissible for initial direct operating loans intended for such equipment, as those terms are typically reserved for long-term capital investments or real estate financing. The regulations around these loans are structured to protect both the lender and the borrower, ensuring that borrowers are not over-leveraged and can realistically manage their debt obligations. This is why the 7 years is the correct answer in this context.