The Livestock Equipment Loan Program is designed to help finance the purchase of livestock-related equipment. Loans may be used for the acquisition of equipment for animal housing, confinement, animal feeding, milk production and waste management.
This is a loan participation program available through the Rural Finance Authority (RFA). Farmers will work through their local lender. Upon completion of an application, the lender will apply for RFA participation. The RFA must have a completed Master Participation Agreement with the lender on file.
The farmer candidate must meet the following criteria:
- Be a resident of Minnesota or general partnership or a family farm corporation, authorized farm corporation, family farm partnership, or authorized farm partnership as defined in section 500.24, subdivision 2;
- Be the principal owner of the livestock for which the equipment will be used;
- Demonstrate an ability to repay the loan;
- Have a total net worth of less than $475,704 (indexed for inflation; please call the RFA for current limitation) including the assets and liabilities of their spouse and dependents;
- Hold an appropriate feedlot registration or be using the loan under this program to meet registration requirements.
While all lending institutions are eligible to be part of the program, they are not required to do so. Their decision to join the program is voluntary.
Each lender must enter into an agreement with the RFA and offer farm loans based upon certain pre-established rules in order to qualify for RFA participation.
The RFA will participate in a livestock equipment loan equal to 90 percent of the purchased equipment value with a participating lender to a farmer who meets the eligibility requirements. Participation is limited to 45% of the principal amount of the loan or $40,000, whichever is less. The loan will be for a maximum of ten years. The interest rates and repayment terms of the authority's participation interest may differ from the interest rates and repayment terms of the lender's retained portion of the loan, but the authority's interest rate must not exceed 2%. The authority may review the interest annually and make adjustments as necessary. Refinancing of existing debt is not an eligible purpose.
The originating lender will retain the balance of each loan. The borrower must satisfy the local lender's guidelines. The local lender will control the day-to- day operation of the loan. Participating lenders are allowed to charge a fixed or adjustable interest rate consistent with their normal lending practices and their agreement with the RFA.
Money may be used for loans for the acquisition of equipment for animal housing, confinement, animal feeding, milk production, and waste management, including the following, if related to animal husbandry:
- watering facilities;
- feed storage and handling equipment;
- milking parlors;
- milking equipment;
- milk storage and cooling facilities;
- manure pumping and storage facilities;
- capital investment in pasture;
- hoop barns;
- portable structures;
- hay and forage equipment; and
- related structural work for the installation of equipment.