Biorefinery Assistance Program – Financing
The Biorefinery Assistance Program offers loan guarantees to eligible applicants. The breakdown for assistance is as follows:
- The proposed operation must have realistic repayment ability
- Maximum Agency (Federal government) participation in an eligible project is 80 percent
- The borrower will need to provide the remaining 20 percent from other non-Federal sources
- There is no minimum loan amount and a maximum loan amount is $250 million
- 90 percent (maximum) guarantee on loans of $0-125 million (under certain conditions)
- 80 percent (maximum) guarantee on loans, if the loan amount is less than $150 million
- 70 percent (maximum) guarantee on loans, if the loan amount is equal to or more than $150 million but less than $200 million
- 60 percent (maximum) guarantee on loans, if the loan amount is $200 million up to and including $250 million
Rate and Term
Rate: Lender's customary commercial interest rate - negotiated by lender & business.
Fixed or variable (but charging not more often than quarterly) and tied to a published base rate.
Term: 20 year or the useful life of the project, whichever is less.
There must be adequate collateral to protect the Lender and Rural Development. The Lender should discount collateral consistent with sound loan to value ratios.
Guarantee Fee: A guarantee fee will be paid at the time guarantee is requested. The fee is calculated on the guaranteed portion of the loan.
- 3 percent Guarantee Fee - loans receiving a 90 percent guarantee
- 2 percent Guarantee Fee - loans greater than 75 percent of total project costs
- 1.5 percent Guarantee Fee - loans greater than 65 percent but less than or equal to 75 percent of total project costs
- 1 percent Guarantee Fee – loans of 65 percent or less of total project costs
Annual Renewal Fee: The annual renewal fee will be paid to the Agency for as long as the guaranteed loan is outstanding including during the construction period. Annual Renewal Fees are as follows:
- 1 percent Annual Renewal Fee - loans that were originally greater than 75 percent of total project costs
- 0.75 percent Annual Renewal Fee - loans that were originally greater than 65 percent but less than or equal to 75 percent of total project costs
- 0.50 percent Annual Renewal Fee - loans that were originally for 65 percent or less of total project costs
Funds may be used for the following eligible project costs as long as the items are an integral and necessary part of the total project:
- Purchase and installation of equipment (new, refurbished, or remanufactured), except agricultural tillage equipment, used equipment, and vehicles
- Construction or retrofitting
- Permit and license fees
- Working capital
- Land acquisition
- Cost of financing, excluding guarantee and renewal fees