• Juanita Schwartzkopf

New USDA Loan Program: Food Supply Chain Guaranteed Loan Program


Focus Management Group - USDA loan program

On December 9, 2021 the U.S. Department of Agriculture (“USDA”) announced that the USDA, through its Rural Development (“RD”) program, is deploying $100 million under the new Food Supply Chain Guaranteed Loan Program. As this adds to the $500 million announced in July for poultry and meat processors. These programs will make available nearly $1 billion in loan guarantees to back private investment in processing and food supply infrastructure. The program is available to meat and poultry processors, and any other companies that will strengthen the US food supply chain.


Under this new Food Supply Chain Guaranteed Loan Program, Program loans may be up to $40 million. Borrowers can be cooperatives, corporations, for profit entities, nonprofit entities, tribal communities, public entities and individuals in rural and urban areas.


According to the announcement, funded loans may be used to:

  • start-up or expand food supply chain activities such as aggregating, processing, manufacturing, storing, transporting, wholesaling or distributing food.

  • address supply chain bottlenecks.

  • increase capacity and help create a more resilient, diverse and secure U.S. food supply chain.

The application process is online only. Lenders may use this link to view the loan guarantee application and related documents.


Application: https://www.rd.usda.gov/food-supply-chain-guaranteed-loans


The terms of these loans may be highly desirable:

  • No guarantee fee.

  • Terms up to 40 years, based on the useful life of the asset.

  • Fixed interest rate loans may receive up to a 90% guarantee.

  • Variable interest rate loans may receive up to an 80% guarantee.

Qualified borrowers must be engaged in or propose to engage in “aggregating, processing, manufacturing, storing, transporting, wholesaling or distributing food,” OR they must be a business with existing or proposed contractual, lease or service agreements with another entity or entities engaged in those activities, OR they must be a business engaged in commercial food production, either directly or through agreements with another entity. Qualified businesses that are privately owned must demonstrate the loan funds will remain in the US and that loan funds will increase capacity and improve the resilience, diversity or security of the US food supply chains.


The typical USDA geographic location requirements are not specifically referenced in the announcement; therefore, there may be more options now available to businesses that are not located in the approved locations.


More information will be forthcoming. Businesses that believe they may qualify for this program, and lenders who have borrowers who may qualify, need to quickly assess the ability to apply for this new program.