AGRICULTURAL FINANCING PRODUCTS

Credit Relief Outreach Program (CROP)

Farmer Eligibility:

• Debt-to-asset ratio of 40% or greater.
• Must have sufficient collateral to cover the value of the CROP loan.
• Have not defaulted on previous WHEDA loans (farmer would become eligible upon repayment).
• Reside in Wisconsin, or if a partnership or corporation the entity must be legally registered in Wisconsin.
• Actively engaged in the operation and current in child support payments, if any.
• Farm located in Wisconsin.
• Unable to obtain conventional financing at reasonable terms.

Use of Loan Proceeds:

• Fertilizer, Seed, Fuel, Land rent, Animal feed, UCC filing charges, Equipment rental, Equipment repair, Tillage service, Custom hire, Crop insurance, Pesticides and herbicides.
• Feeder animals purchased and sold within the term of the loan
• Utility bills pertaining solely to the production of the agricultural commodity.
• Labor costs directly related to planting and harvesting the agricultural commodity excluding labor costs paid to the farmer and spouse.
• Refinance of last year’s CROP loan as long as at least 60% of that loan is repaid.

Terms:

• Maximum loan amount is $100,000.00.
• 90% guarantee on loans less than $50,000; 80% guarantee on loans $50,000 and above.
• Interest rate is Prime + 1% on the date the Note is written.
• Maturity date is no later than March 31 of the year following origination.

Fee:

• Application fee is 1% of the loan amount with a minimum of $500.00 that may be financed and included in the loan request.

Crop Insurance Requirements:

• The agricultural commodity financed with the CROP loan must be insured while growing and while in storage.
• A minimum level of Catastrophic Coverage (CAT) is required for crops.  This is a change as the insurance requirement in the past only for hail insurance.
• Keep in mind that CAT coverage needs to be purchased by March 15.

Farm Asset Reinvestment Management (FARM) Guarantee

Farmer Eligibility:

• Currently operating a farm
• Debt-to-asset ratio, including assets and liabilities incurred with the FARM loan, of 85% or less.
• Must have sufficient collateral to cover the value of the FARM loan.
• Has not defaulted on previous WHEDA loans (farmer would become eligible upon repayment).
• Reside in Wisconsin, or if a partnership or corporation the entity must be legally registered in Wisconsin.
• Actively engaged in the operation and current in child support payments, if any.
• Farm located in Wisconsin.
• Unable to obtain conventional financing at reasonable terms.

Use of Loan Proceeds:

• Purchase or improve land and buildings for agricultural purposes.
• Purchase or improve machinery and equipment.
• Purchase livestock to be held for more than one year.

Terms:

• Minimum loan amount is $10,000.00; no maximum.
• Maximum guarantee is the lesser of:
  1. 25% of the FARM loan; or
  2. the farmer’s net worth, including assets and liabilities incurred with the FARM loan; or
  3. $200,000.00 (Limited to $100,000.00 if any other state or federal credit assistance is used for the same loan).

• Maximum term of the guarantee is 10 years for land and building acquisition.
• Maximum term of the guarantee is 5 years for land and building improvements; and acquisition of equipment, machinery or livestock.
• Amortization may exceed the term of the guarantee but cannot exceed the useful life of the security.
• Interest rate is set by the lender and is subject to WHEDA approval.
• Loan must be secured by the assets being financed.  Additional collateral may be required including personal guarantees.

Fees:

• $150.00 nonrefundable fee that may be financed and included in the loan request.
• 1.00% of the guarantee amount due upon closing and may be financed and included in the loan request.

For more information on WHEDA programs, call us or visit their website at www.wheda.com