The purpose of this loan is to enable farmers to adopt
practices that will lead them to a more sustainable farming
system. Loans are for capital purchases, which enhance
the environmental and economic viability of the farm. Eligible
purchases may include: rotational grazing systems, tree plantings,
on-farm energy production, composting equipment, solar-powered
equipment, low-cost livestock housing, hoop buildings, processing
equipment, reduced or no herbicide weed control, equipment
to handle cover crops, alternative fertilizer management
equipment, soil conserving equipment and more.
When considering a proposed project ask the following three
questions:
- Does the project make efficient use of resources?
- Is there an environmental benefit?
- Does the project show
a reasonable return on the additional investment?
If the
answer to these questions is yes and the project pertains
directly to your farming operation it is likely that your
proposal will be eligible. Lloans under this program
will be made only to residents of the State of Minnesota
who are actively engaged in farming.
The maximum loan per farm family is $25,000. On joint projects
funding will be $25,000 per farmer up to $100,000 total, whichever
is less. A fixed interest rate of 3% will be charged. Loans
will be made for future capital purchases. Operating expenses
or refinancing of existing debt is not eligible. The term
of the loan will match the expected life of the collateral
but will not exceed 7 years. Payments will be on a semi-annual
schedule. The State requires a 2 to 1 collateral to loan ratio.
Other farm equipment may be offered as additional first lien
collateral to obtain the required 2 to 1 ratio.
Applications will be reviewed for eligibility by a loan
review panel that consists of the following individuals:
- two lenders with agricultural experience
- two resident farmers of the state using sustainable agricultural methods
- two resident farmers of the state using organic agricultural methods
- a farm management specialist
- a representative from a post secondary education institution
- chairperson from the department
The review panel will score each application using the Evaluation
Profile (PDF: 16
KB / 2 pages). Qualifying applications will then be reviewed
by the Agricultural Development & Financial Assistance
Division for creditworthiness. This is a competitive program
so all applications will be scored on their relative merit
in each category. Give special attention to the Evaluation
Profile when formulating ideas for your application. Keep
in mind that the application is what the review panel uses
to make recommendations. Please give descriptive details
about your operation and project.
Please Note: Our continued funding depends on repayment
from existing loans. Applications are accepted and reviewed
throughout the year. We realize farmers need to make timely
decisions when making purchases. For this reason a purchase
can be made after the application has been sent to us and
before the review panel meets and still qualify under this
program. We cannot, of course, commit to approving a loan
until the loan review panel has met and the applicant's ability
to repay the loan has been assessed. Hopefully this will
allow the flexibility you need to make good management decisions.
To complete your application we need you to include the
following information: a current cash flow projection of
your farming operation, the last three years of Federal Income
Tax Form 1040, a signed balance sheet and the signed application.
If you have questions concerning the application and the program call Mary Hanks at: 651 201-6277. Completed applications should be sent to:
Sustainable Agriculture Loan Program
Minnesota Department of Agriculture
625 Robert Street North
St. Paul, MN 55155-2538
Please keep a copy of your application for your own records. Submitted applications will not be returned. Thank you for your interest in this program.
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