Rural Cooperative Stock Purchase

The Rural Cooperative Stock Purchase  Program works in conjunction with the Guaranteed Business and Industrial loan program allowing loans to be made to producers of agricultural products seeking to join new cooperatives that produce value-added goods. Family farmers can use the B&I loan program to help pay for stock in a start-up cooperative that will process an agricultural commodity into a value-added product. 

• The maximum guarantee is 80%.
• The maximum loan amount is $750,000.
• Loans have a maximum term of 7 years.
• The interest rate is negotiated between the producer and the lender.
• The guarantee fee is 2% of the guaranteed portion of the loan.
• There is no test for availability of credit from commercial creditors.
• Personal and corporate guarantees are normally required.
• A 10% tangible balance sheet equity is required.

Security Requirements

The stock acquired with loan funds and the personal guarantee of the producer will ordinarily be taken, but the lender will determine the sufficiency of collateral in accordance with it's normal lending practices.

Other Criteria:

The co-op must be a new cooperative venture, not an expansion or diversification of an existing co-op. The producer must be a family-sized farmer, as defined by the Farm Service Agency. 

Timeframes for Turnaround

Loans are to be approved within 60 days of receipt of a completed application, subject to the availability. 

Where Do You Apply?