USDA Food Supply Chain Guarantee Loan Program
Peapack-Gladstone Bank is pleased to participate in the UDSA Food Supply Chain Guaranteed Loan Program, aimed at strengthening the food supply chain and increase access to affordable capital for food systems infrastructure in America’s rural and urban communities.
Overview
The Food Supply Chain Guaranteed Loan Program provides financial support to qualified lenders whose loan applicants want to start or expand middle of the food supply chain activities such as aggregation, processing, manufacturing, storage, transportation, wholesale, or distribution of food. The program’s goal is to increase capacity and help create a more resilient, diverse, and secure U.S. food supply chain.
Who is eligible?
- For-profit or nonprofit businesses
- Cooperatives
- Food supply chain entrepreneurs
- Public bodies
- Federally-recognized tribes
How can the guaranteed loan funds be used?
Examples of fund uses by food supply chain businesses include:
- Business conversion, enlargement, repair, modernization, or development
- The purchase and development of land, buildings, and associated infrastructure for commercial or industrial purposes
- Building or equipping facilities for lease to public or private enterprises engaged in commercial or industrial operations
- The purchase and installation of machinery and equipment, including manufacturing and Information Technology (IT) systems
- Working capital
To get started, contact us at PGBUSDALOANS@pgbank.com.
Resources:
To ensure that our clients are informed with the appropriate information and are equipped to make educated decisions, we will continue to provide you with helpful resources:
Please visit the Food Supply Chain Guaranteed Loan Program website to see additional information on the program.
Any regulated lender - Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), or Farm Credit System (FCS) - is eligible to participate in the FSC program. This includes banks, credit unions, loan funds, and Community Development Financial Institutions (CDFIs), among others.
Any regulated lender - Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), or Farm Credit System (FCS) - is eligible to participate in the FSC program. This includes banks, credit unions, loan funds, and Community Development Financial Institutions (CDFIs), among others.
Frequently Asked Questions
Is a food distributor that is part of a Holding Company that includes a retail company eligible?
Food Distribution is an eligible activity for the Food Supply Chain (FSC) Guaranteed Loan Program. The FSC Program would not cover any financing on the retail operations but expansion of the distribution activities should be eligible for the FSC Program. Food Supply Chain (FSC) guaranteed loans are available to qualified applicants and projects to facilitate financing for the start-up or expansion of activities in the middle of the food supply chain, particularly the aggregation, processing, manufacturing, storing, transporting, wholesaling, or distribution of food, to increase capacity and help create a more resilient, diverse, and secure U.S. food supply chain.
Does a fertilizer producer qualify? We also remove food waste
Unfortunately, fertilizer/food waste is not an eligible product for the Food Supply Chain (FSC) Guaranteed Loan Program. Food Supply Chain (FSC) guaranteed loans are available to qualified applicants and projects to facilitate financing for the start-up or expansion of activities in the middle of the food supply chain, particularly the aggregation, processing, manufacturing, storing, transporting, wholesaling, or distribution of food, to increase capacity and help create a more resilient, diverse, and secure U.S. food supply chain. The Notice of Funding Opportunity for the FSC Program defines food as: For the purpose of this notice, food or food product for human consumption except alcoholic beverages, tobacco, and dietary supplements.
We process and co-package tomato sauces, chutneys, etc. Would we qualify?
Expansion of food processing/packaging are eligible activities for the Food Supply Chain (FSC) Guaranteed Loan Program. Food Supply Chain (FSC) guaranteed loans are available to qualified applicants and projects to facilitate financing for the start-up or expansion of activities in the middle of the food supply chain, particularly the aggregation, processing, manufacturing, storing, transporting, wholesaling, or distribution of food, to increase capacity and help create a more resilient, diverse, and secure U.S. food supply chain.
Is there list of current lenders in the program?
Under the Food Supply Chain (FSC) Guaranteed Loan Program, USDA Rural Development works directly with approved lenders to back (guarantee) their loans to qualifying meat or poultry processors and others operating in the middle of the food supply chain. This includes food aggregators, processors, manufacturers, wholesalers, distributors, and other types of entities that transport and store food. As a potential borrower, you work directly with your lender, who then applies for the program on your behalf. If you're interested in financing available through the FSC program, you can start by asking your lender if they plan to participate.
We are located in Philadelphia and I have not been successful identifying a bank that is enthusiastic about participating in this program. Any suggestions?
Thank you for your interest in the Food Supply Chain Guaranteed Loan Program. Under the Food Supply Chain (FSC) Guaranteed Loan Program, USDA Rural Development works directly with approved lenders to back (guarantee) their loans to qualifying meat or poultry processors and others operating in the middle of the food supply chain. This includes food aggregators, processors, manufacturers, wholesalers, distributors, and other types of entities that transport and store food. As a potential borrower, you work directly with your lender, who then applies for the program on your behalf. If you're interested in financing available through the FSC program, you can start by asking your lender if they plan to participate.
Can owners convert existing business loans to equity to meet the equity requirements?
If the request is if owners can convert notes payable to ownership to equity to meet the Food Supply Chain (FSC) Guaranteed Loan Program, that is allowable. The FSC Program also allows for subordinated debt when subject to a standstill agreement for the life of the loan.
Can the funds be used for marketing / advertising?
Working capital is an eligible use of funds for the Food Supply Chain (FSC) Guaranteed Loan Program, the working capital project needs to be associated with an eligible expansion project. Food Supply Chain (FSC) guaranteed loans are available to qualified applicants and projects to facilitate financing for the start-up or expansion of activities in the middle of the food supply chain, particularly the aggregation, processing, manufacturing, storing, transporting, wholesaling, or distribution of food, to increase capacity and help create a more resilient, diverse, and secure U.S. food supply chain.
How many lenders are eligible currently?
Any regulated lender - Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), or Farm Credit System (FCS) - is eligible to participate in the FSC program.
What are the qualifications and parameters for the Loan Program?
Food Supply Chain (FSC) guaranteed loans are available to qualified applicants and projects to facilitate financing for the start-up or expansion of activities in the middle of the food supply chain, particularly the aggregation, processing, manufacturing, storing, transporting, wholesaling, or distribution of food, to increase capacity and help create a more resilient, diverse, and secure U.S. food supply chain.
We are a sustainable farm that produces long grain rice utilizing Regenerative Agriculture Practices. We currently deal with UNFI, KeHE and Chex Finer Foods. The cost to board into a retail chain is astronomical and would like to see what you have to offer.
Agricultural production is not eligible for the Food Supply Chain (FSC) Guaranteed Loan Program but activity after agricultural production could be eligible. You can find additional information about the program on the FSC Guaranteed Loan website.
What are the eligibility criteria?
Food Supply Chain (FSC) guaranteed loans are available to qualified applicants and projects to facilitate financing for the start-up or expansion of activities in the middle of the food supply chain, particularly the aggregation, processing, manufacturing, storing, transporting, wholesaling, or distribution of food, to increase capacity and help create a more resilient, diverse, and secure U.S. food supply chain.
What is the interest rate and payment schedule?
The interest rate and amortization term are negotiated between the lender and the borrower. The FSC Program requires a fully amortizing note.
Are there restrictions on what areas of expansion the funds can be used towards? Employees, infrastructure, equipment, larger facility, etc?
The FSC requires expansion of a business in the middle of the food supply chain. The NOFO does not define the type of expansion. The expectation is that the majority of the FSC guaranteed loan requests will be for fixed assets.
Would this program benefit foreign food manufacturers importing to the USA?
Must a company have an official USA office, i.e., an INC. or LLC, for example to qualify for this program?
Must a company have an official USA office, i.e., an INC. or LLC, for example to qualify for this program?
The Notice of Funding Opportunity (NOFO) for the Food Supply Chain (FSC) Guaranteed Loan Program provides the following guidance: (b) Eligible uses of funds. Borrowers must demonstrate, to the Agency’s satisfaction, that loan funds will remain in the United States and the facility being financed and the uses of the loan funds will support the start-up or expansion of activities in the middle of the food supply chain, particularly the aggregation, processing, manufacturing, storage, transportation, wholesaling, or distribution of food, to increase capacity and help create a more resilient, diverse, and secure U.S. food supply chain.
Will loan recipients be required to disclose the financials of all investors as required in many other USDA grant and loan programs?
The Food Supply Chain (FSC) Guaranteed Loan Program requires the lender to provide a financial review and financial information on any guarantor that holds 20% or greater of the borrower.
I am interested in the process and the timing. We are a start up but have tremendous capability in solving Food Desert issues.
Rural Development’s goal is to process complete Food Supply Chain (FSC) Guaranteed Loan Program applications within 30 days of receipt of a complete application from a lender. A complete application would include the third party feasibility study for the guaranteed loan request and a completed National Environmental Policy Act environmental review. The lender submits the application for the FSC loan request to Rural Development.
Very interested to know, which food manufacturing industries qualify, how to apply and if monies could be used to implement the coming new FDA section 204 of FSMA?
Under the Food Supply Chain (FSC) Guaranteed Loan Program, USDA Rural Development works directly with approved lenders to back (guarantee) their loans to qualifying meat or poultry processors and others operating in the middle of the food supply chain. This includes food aggregators, processors, manufacturers, wholesalers, distributors, and other types of entities that transport and store food. As a potential borrower, you work directly with your lender, who then applies for the program on your behalf. If you're interested in financing available through the FSC program, you can start by asking your lender if they plan to participate.
Please visit the Food Supply Chain Guaranteed Loan Program website to see additional information on the program.
Any regulated lender - Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), or Farm Credit System (FCS) - is eligible to participate in the FSC program. This includes banks, credit unions, loan funds, and Community Development Financial Institutions (CDFIs), among others.
Rural Development does not have a list of approved lenders for the FSC Program as mentioned above, any regulated lender is eligible to participate in the program.
Please visit the Food Supply Chain Guaranteed Loan Program website to see additional information on the program.
Any regulated lender - Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), or Farm Credit System (FCS) - is eligible to participate in the FSC program. This includes banks, credit unions, loan funds, and Community Development Financial Institutions (CDFIs), among others.
Rural Development does not have a list of approved lenders for the FSC Program as mentioned above, any regulated lender is eligible to participate in the program.
How are women and small businesses supported through this initiative?
The purchase of an operating meat locker would have to include some type of expansion of the operation. The Notice of Funding Opportunity (NOFO) for the Food Supply Chain (FSC) Guaranteed Loan Program provides the following requirement on a meat processing facility: (3) Borrowers engaged or proposing to engage in processing of meat, poultry, processed egg products, and Siluriformes either directly or through contractual, lease or service agreements with another entity or entities including affiliated entities, must comply with the requirements of the U.S. Department of Agriculture (USDA) Food Safety and Inspection Service. Borrowers engaged or proposing to engage in processing of other foods and food ingredients either directly or through contractual, lease or service agreements with another entity or entities including affiliated entities, must comply with the requirements of the Food and Drug Administration. All borrowers must comply with requirements of state, tribal and local governments.
The purchase of a meat locker is likely eligible through the Business and Industry Guaranteed Loan Program.
The purchase of a meat locker is likely eligible through the Business and Industry Guaranteed Loan Program.
Are these loans able to be used for the purchasing of existing meat lockers?
USDA’s Food Supply Chain program is expressly designed to support the start-up or expansion of activities in the middle of the food supply chain. While not limited to small businesses, USDA is encouraging new investments to increase capacity and create a more resilient, diverse, and secure U.S. food supply chain. Through the FSC program, USDA seeks to support a level playing field to enable competition while embedding equity principles throughout our actions to ensure that our programs, services and decisions reflect the values of equity and inclusion.