January 24, 2022
Main Street Monday – USDA Announces New $1.4 Billion Government Guaranteed Loan Program for Food Supply Chain Businesses
Effective immediately, the U.S. Department of Agriculture is forming a Food Supply Chain Guaranteed Loan Program. The program is intended to expand access to financing for food systems infrastructure and create a more diverse and secure food supply chain in the United States. Funding will be available for applicants involved in aspects of the food chain such as aggregation, processing, manufacturing, storage, transportation, wholesale, or distribution of food.
Loan amounts, rates, and terms for the Food Supply Chain Guaranteed Loan Program are:
• $40 million maximum loan amount and no minimum loan amount
• 90% guarantee if the interest rate is fixed for the life of the loan at no greater than current WSJ Prime plus 200 basis points
• 80% guarantee for all other loans
• Loan terms may not exceed 40 years
• No guarantee fees or annual renewal fees
• Available for all rural areas and urban communities anywhere in the US or territories
• Intangible assets can comprise up to 25% of the collateral stack
Applicants must be for-profit or nonprofit businesses, cooperatives, federally-recognized Tribes, public bodies, or food supply chain entrepreneurs.
The benefits for lenders that are involved in the program include:
• Expanding legal lending limits
• Secondary Market sale of the guaranteed portion
• Increase ROI
• Mitigate risk
• New business development opportunities
• Community Reinvestment Act consideration
• Local people and local access
Find more information here!
USDA Program Fact Sheet