September 06, 2011

Ag Loan Program Now Expanded to Agribusinesses

The Missouri Value-Added Loan Guarantee Program has been expanded to offer loan guarantees to qualifying Missouri agribusinesses, allowing businesses like feed and agricultural supply stores, veterinary clinics, food processors and equipment manufacturers to participate alongside Missouri's agricultural producers. The expanded scope became effective August 28, 2011, creating an opportunity for those businesses to receive a loan guarantee up to $125,000.

"This is an important change for our producers and agribusinesses as they look for ways to add value to Missouri's agricultural commodities and expand opportunities for their operations," said Director of Agriculture Dr. Jon Hagler. "This program provides a guarantee for Missouri's farmers and agribusiness owners as they seek loans from commercial lenders, paving the way for them to grow their farms and farm-oriented operations."

The Missouri Agricultural and Small Business Development Authority (MASBDA) administers the program to foster the expansion of existing and creation of new enterprises that will aid rural economic development. Through the program, MASBDA may provide a 50 percent first-loss guarantee on loans up to $250,000 from a commercial lender.

A qualifying agribusiness includes businesses whose primary customers are producers of agricultural goods and products, and businesses who support the agriculture industry by providing goods and services used for producing or processing agricultural products.

Loans by local lenders, which may be guaranteed by the Value-Added Loan Guarantee Program, may now be used to:

  1. Finance agricultural property, including land, buildings, structures, improvements and equipment used for the purpose of processing, manufacturing, marketing, exporting or adding value to an agricultural product
  2. Finance the expansion, acquisition, construction, improvement or rehabilitation of a qualifying agribusiness
  3. Purchase stock in a start-up cooperative that processes an agricultural product.

Loan proceeds may not be used for producing livestock or agricultural crops except for grapes to be processed into wine.

Borrowers qualifying for the Value-Added Loan Guarantee Program may also qualify for the Missouri Linked Deposit Program, administered by the Missouri State Treasurer's Office, which provides funds at reduced interest rates to lenders which are then shared with agricultural borrowers.

For more information about the loan guarantee, dual eligibility and other agricultural finance programs, visit or call MASBDA at (573) 751-2129.