California IBank Farm Loan Program (IBank)

IBank’s Small Business Finance Center features a Farm Loan Program that is designed to support direct loans to small farms in California through participating Corporations that are also approved lenders of the U.S. Department of Agriculture, Farm Service Agency (FSA) that guarantees up to 90% of those loans.

Farm Loan financing has been used on farms for cattle, hay, berries, nuts, vegetables, dairy and more.

“Authorized Farm Costs” means the costs incurred by a Farm, including:

• Operating and production expenses, including the purchase, construction or repair of buildings, machinery, equipment and storage and drying facilities, the purchase of animals, seed and fertilizer, the purchase of real estate and the costs of improvement or repairs thereto.

• Costs associated with the purchase of real estate, including easements and rights-of-way to establish or enlarge a Farm.

• Costs associated with water development, soil conservation, forestation, drainage, pollution abatement and related measures.

• Disaster losses including actual losses incurred in connection with disaster damaged or destroyed Farm property or production enterprises, or both, including annual operating and production expenses, construction and improvement of buildings and facilities, and land and water development.

• Refinancing debt including the costs associated with the issuance of such debt and Lender fees and charges, where the debt to be refinanced was incurred for Authorized Farm Costs.

• “Farm” means a business which is primarily engaged in producing crops, livestock products or aquatic organisms through the utilization and management of land, water, labor, capital, and basic materials including seed, feed, fertilizer, and fuel.

• Financing qualifications are based on lender criteria.

• The interest rate, which shall not exceed five percent (5%) above the prime rate listed for the United States in the Wall Street Journal on the date of the Loan commitment.

• The term, which shall not exceed seven years, except for a Guaranteed Farm Borrower Loan. The term of a Guaranteed Farm Borrower Loan shall not exceed that authorized by USDA.

• The Loan amount which shall not exceed the maximum amount allowed by the USDA Farm Service Agency Guaranteed Farm Loan Program.

• The Farm Lender shall be authorized to charge the Farm Borrower a fee of three percent (3%) of the amount of the Farm Borrower Loan, in addition to the current fee required to be paid to USDA on any Guaranteed Farm Borrower Loan.

• “Farm Borrower Loan” means a Term Loan or Line of Credit Loan from a Farm Lender to a Farm Borrower pursuant to a Farm Borrower Agreement.

The Small Business Finance Center (SBFC) partners with Financial Development Corporations (FDCs) to provide loan guarantees and direct loans for small businesses that experience capital access barriers. Historically, three FDCs have requested and were approved to use the Farm Loan Program.

FDCs are able to serve small businesses throughout the state of California. Contact geographically closest FDC office to find out more information.

Participating Lenders (FDC offices)

SBFC Guidance Manual (Directives and Requirements)