The Official U.S. Maple Syrup Almanac -- 2017 Alamanc_2017 - Page 45

BUSINESS SIDE Low-interest loans available to maple producers LOAN RATES By DEBORAH JEANNE SERGEANT Could you use a loan for expanding your maple operation’s storage capacity? You’re in luck--if you qualify. FSA’s Farm Storage Facility Loan (FSFL) program offers farmers low-inter- est loans to improve their farm’s storage capacity and includes maple operations. David Holck, executive director for Farm Service Agency for Washington, Warren, Saratoga and Rensselaer coun- ties in New York, said that containers for maple sap and lines to the evaporator are eligible for FSFLs, and, an addition to the FSFL recently announced by the USDA, containers for syrup, too. Holck said that farmers must prove their need for sap or syrup storage or tubing, pay a $100 application fee, and complete the paperwork. Even producers able to acquire com- mercial credit may apply for the FSFL. The program is meant to help small to mid-sized farms, new producers, and underserved farmers. Holck advises producers to know how much they will spend before they approach their FSA office about the loan since they will need a down payment of 15 percent for loans over $50,000. For a loan between $50,000 and $100,000, producers the equipment provides the security. For items over $100,000, farm- ers must present more security, “often in the form of real estate,” Holck said. Though FSA runs a credit report, a producer’s credit score doesn’t necessar- ily affect his approval for a FSFL as much as the balance sheet. Holck said that the U.S. Maple Syrup Almanac 2017 Interest rates for loans disbursed in May are as follows: Loan Term Interest Rate 3 years 1.500% 5 years 1.875% 7 years 2.125% 10 years 2.375% 12 years 2.375% For more information about the Farm Storage Facility program, visit www.fsa.usda.gov/pricesupport. FSA wants to see the last 90 days’ assets and liabilities and the credit report helps confirm the information. He compared the FSFL with a vehicle loan. Depending upon the producer’s busi- ness structure, the FSA may need to see his personal assets and liabilities, too. “We’d need a cash flow projection to show income and analyze based on their cash flow, if they’d generate enough income to make their loan payments,” Holck said. “Any producer would have to show their ability to repay. If it shows on paper you have the ability to make the payments, I don’t anticipate any problems in approving the loan.” Once the producers purchases and installs the equipment, the FSA can close and disperse the funds. Holck said that the producer may need to talk with his supplier or use a line of credit to acquire the equipment. “Now’s the time to start thinking about upgrades and applying,” Holck said. “It can take a couple months between apply- ing and getting it all done. This is timely for producers to start the process rolling so everything is in place by the time they want to start tapping.” The interest rate is fixed until the loan is paid off. If you’re unsure about whether the loan could apply to your business, Holck advises calling your local FSA office to discuss your farm’s needs. 45