Family Farm Breeding Livestock Tax Credit Program
The Missouri Agricultural and Small Business Development Authority provides Missouri tax credits to Missouri’s lenders who make breeding livestock loans to small farmers.
How Does the Program Work?
To participate in the loan program, a small farmer shall first obtain approval for a family farm breeding livestock loan from an eligible lender. The small farmer shall not be charged interest by the lender for the first year of the qualified family farm livestock loan.
Upon approval of the family farm livestock loan by a lender the loan documents should include:
- MISSOURI FORM F,
- Lender’s completed loan application, promissory note, amortization schedule, and security filings,
- Small farmer’s current financials (cannot be more than 6 months old),
- Projected cash flow, post loan closing,
- Description of livestock purchased and the purchase price, and
- Review Fee = 1.0% of loan amount
These shall be submitted for approval by the Missouri Agricultural and Small Business Development Authority (MASBDA). MASBDA’s approval process shall take into consideration:
- The small farmer’s ability to repay the family farm livestock loan,
- The purchase price of the livestock must be appropriate for the type and quality of livestock purchased,
- The general economic conditions of the area in which the small farmer is located,
- The prospect of a financial return for the small farmer, and
- Such other factors as the authority may establish based on individual loans characteristics.
Who is Eligible?
“Small Farmer”: A farmer who is a legal Missouri resident and who has less than $250,000 in gross agricultural product sales per year.
“Lender”: Any state or national bank, farm credit system, bank for cooperatives, federal or state chartered savings and loan association, federal or state building and loan association, or small business investment companies all of which must be subject to credit examination by an agency of the state or federal government.
Loan Amount and Terms
“Maximum eligible loan” cannot exceed 90% of the cost of purchasing breeding livestock. The maximum amount of loan for each type of livestock is:
- Beef cattle - $75,000
- Dairy cattle - $75,000
- Sheep - $30,000
- Goats - $30,000
- Swine - $35,000
Tax Credit Amount
The maximum amount of tax credits that may be issued to all eligible lenders in any fiscal year cannot exceed $300,000.
The tax credit is equal to 100% of the first year’s interest waived on a qualified eligible loan.
Each small farmer shall be eligible for only one family farm livestock loan per immediate household family and only one type of livestock.
The small farmer must be able to provide proof of citizenship, identity and residence. If the farmer employs laborers, he/she must also provide proof of enrollment and participation in the federal work authorization program.
Review Fee= 1.0% of loan amount.
A $50 fee is charged for each tax credit transfer.
MASBDA will issue the tax credit certificate after receiving a certification from the lender of the actual interest waived after the first year of the eligible loan. The interest due certification must be received no later than 30 days after the first year anniversary of the loan.