Articles & Alerts
Would Your Business Benefit from Participating in the USDA’s Food Supply Chain Guaranteed Loan Program?
As part of its Build Back Better Initiative, the United States Department of Agriculture (USDA) has introduced the first-of-its-kind Food Supply Chain Guaranteed Loan Program to apply to lenders to non-rural businesses. The program will support lenders to make loans up to $40 million to finance food systems projects with a special focus on bolstering the food supply chain. The investments will be particularly valuable in optimizing food aggregation, processing, manufacturing, storage, transportation, wholesaling, and distribution infrastructure.
Eligible borrowers should work closely with lenders to ensure that the borrowers meet the criteria, as they must be directly engaged in the middle of the food supply chain. Borrowers may also encourage their lenders to get approved through the OneRD Guarantee Loan Initiative so they can participate.
Unlike other government-backed loan programs, the USDA Food Supply Chain Guaranteed Loan Program offers more favorable repayment terms, no extensive fees, and more competitive interest rates. The repayment period is determined by the lender based on the use of guaranteed loan funds, the useful economic life of the assets being financed, and the borrower’s repayment ability. It is almost twice as long as the repayment period offered by similar Small Business Association (SBA) loan programs. This program also does not require any of the renewal or guarantee fees imposed by other SBA and USDA loans. Finally, borrowers participating in the Food Supply Chain loan program may choose either a fixed-rate or adjustable interest rate loan.
To further discuss the impact of this legislation and related opportunities for your business, contact Greg Wank, Food and Beverage and Branded CPG Leader at [email protected], or your Anchin Relationship Partner.