The Minnesota Department of Agriculture’s Rural Finance Authority (RFA) is now accepting applications for $15 million in revolving loans to support Minnesota’s small and medium-sized meat and poultry processors.
The Meat and Poultry Intermediary Lending Program (MPILP) offers low-interest loans for the start-up, expansion, and operation of slaughter and further processing of meat and poultry. Loans of up to $7 million are available at a 3% fixed interest rate with a term of up to 10 years. Funds can be used to purchase land or equipment, cover start-up costs, and make other business investments for expansion process. Returned funds will be made available to new borrowers.
MPILP is funded by a grant from United States Department of Agriculture Rural Development (USDA-RD).
Interested Borrowers
Interested borrowers can contact the Rural Finance Authority by emailing RFA.loans@state.mn.us or calling Mary Gritzmacher at 651-201-6022. You may also start by completing the RFA's initial intake form found under the “Forms + Resources” section of this page.
Eligibility and Limitations
MPILP loans are available to primary (slaughter) and secondary (cut, pack, further processing) meat processors.
Loans are available in the State of Minnesota.
Borrowers must comply with State of Minnesota/or USDA Food Safety and Inspection Service.
Borrower must self-certify that it does not own a top-four market share in beef, pork, chicken, or turkey processing and that the requested loan would not propel them into a top-four position.
Loan Uses
Interested borrowers are encouraged to discuss their project with a loan officer before applying and must identify any/all purpose(s) of the loan in their application. Recipients may use loan funds for any of the following purpose(s):
- Land purchase and development
- Purchasing equipment and machinery
- Equipping and building facilities leased to meat/poultry processors
- Leasehold improvements
- Pollution control and abatement
- Start-up costs and working capital
- Fees and expenses related to state and federal inspection
- Other investments related to worker and/or food safety
- Feasibility studies
Rate
Interest Rate: 3%
Loan Limits
$50,000 minimum loan
$7,000,000 maximum loan
Collateral
MPILP loans are collateralized by business assets.
- Real Estate: Maximum loan length of 10 years (Maximum 25-year amortization). (Please note: Strong collateral will not be sufficient to justify loan approval if repayment capacity cannot be established and documented.)
- Business Equipment & Assets & A/R: Depending on the life of the equipment — loan extended maximum of 5-7 years (exceptions based on equipment type). In general, terms will match the useful life of the business asset being financed.
Fees
- $500 nonrefundable application fee
- 1% origination fee
- Borrower is responsible for all third-party fees associated with loan processing and collateral perfection
Underwriting Process
Loans will be underwritten based on historic and projected cash flows with demonstrated ability to repay being the primary underwriting consideration. All loans require concurrence from USDA on underwriting recommendation.
Required Documents
A partial list of required documents appears below. Each loan is unique, and additional documents may be required based on the circumstances of the loan.
- Business Plan History and description of business, or Business Plan if a start-up. The description or business plan needs to address facility size, number of animals to be processed by week or day, availability of animals in proximity to the facility (with letters of interest and support from suppliers), who the meat will be distributed to (with letters of interest of buyers), competitors (where potential customers are currently taking their animals and pricing comparison), ownership, and management. Must also discuss the inspection type of daily inspection (state, federal).
- Business financial statements
- Year to date P&L
- Current business balance sheet
- Business tax returns
- Proof of business ownership
- Trade name registration, if applicable
- Schedule of sources and uses
- Proof of personal equity injection
- Business bank statements
- Personal financial statement
- Personal tax returns
Disclosures and Requirements
The Minnesota Department of Agriculture (MDA) received a grant from United States Department of Agriculture Rural Development (USDA-RD) in the amount of $15,000,000 to be administered by the Minnesota Department of Agriculture (MDA) Authority Section 751 of the Consolidated Appropriations Act of 2021. MDA will remain in compliance with all applicable laws, regulations, Executive Orders, and other generally applicable requirements for the duration of the Agreement including 2CFR 200, 400,415,416, 417, 418, 421, and 422.
The MDA will strive to make progress towards capacity expansion or improved operations of small and medium- sized meat and poultry processors, businesses assisted, jobs created, contributing to improving the resiliency of meat and poultry supply chain and improvements in value added processes.
As recipients of Federal financial assistance, RBCS grant and loan program recipients are required to comply with the applicable Federal, State and local laws. Title VI of the Civil Rights Act of 1964 prohibits discrimination by recipients of Federal financial assistance. Grant recipients are required to adhere to specific outreach activities. These outreach activities include, contacting community organizations and leaders that include minority leaders, advertising in local newspapers and other media throughout the entire service area, and including the nondiscrimination slogan. “This is an Equal Opportunity Program. Discrimination is prohibited by Federal Law, “in methods that may include, but not be limited to, advertisements, public broadcasts, and printed materials, such as brochures and pamphlets.
In addition to the “Equal Opportunity and Nondiscrimination Requirements” stated above, each grantee must keep and provide data on race, gender, national origin, and any such records, accounts, and other sources of information and facilities as may be pertinent for USDA RBS to determine whether the Grantee has complied or are complying with the regulations. Beneficiaries in the MPILP program are the entities engaged in primary processing (slaughter) or further processing of meat and poultry receiving grant funding. Grantees should have available the ownership demographics of the entities for USDA RBS review showing the extent to which members of a minority group are beneficiaries of a Federal assistance program. In addition, the compliance review will ensure that equal access to the Program benefits and activities are provided for persons with disabilities and language barriers.
