Hawaii Qualified Farmer Loan

The Hawaii Qualified Farmer Loan is part of the Hawaii Agricultural Loan Division.

The State of Hawaii, Department of Agriculture’s Agricultural Loan Division administers the Agricultural Loan Program and the Aquaculture Loan Program. The intent of the programs is to help promote agricultural and aquacultural development of the State by providing credit at reasonable rates and terms to qualifying individuals or entities. Through the establishment of a revolving loan fund, credit is made available by supplementing private lender sector loan funds or by providing direct funding.

Considered a “lender of last resort”, the program is not intended to compete with private sector lenders. Prospective applicants must inquire with and be denied credit from private sector lenders prior to filling an application. In addition, prospective applicants must fulfill applicable eligibility requirements. Applicants that are not able to obtain denials from the private lending sector may inquire with the private lender on the possibility of utilizing the insured/guaranty and/or participation loan facilities.

A Qualified Farmer is:

• A citizen of the United States who has resided in Hawaii for the preceding three years, or any permanent resident alien who has resided in Hawaii for the preceding three years; and

• A person of proven farming ability who has operated their own farm for two or more years; and

• A person who devotes most of their time or derives most of their net income from the farming operation.

Sole proprietors, partnerships, corporations, and cooperatives are among the legal forms of businesses eligible to apply for a loan. Other forms of businesses may also be eligible for other loan facilities.

• An eligible sole proprietor is one who qualifies individually by meeting the requirements listed above.

• Eligible partnerships are controlled by at least seventy-five percent by persons who qualify individually.

• Eligible corporations are those where at least seventy-five percent of the stockholders and directors qualify individually.

• Eligible cooperatives shall have a majority of its board of directors and a majority of its membership qualifying individually and shall be engaged in marketing, purchasing, and processing, and providing of farm business services.

1. Loan amount shall not exceed eighty-five per cent of the value of the security offered and cannot be made on un-surveyed land.

2. The Micro-Loan application process minimizes paperwork and the loan processing procedure is expedited.

3. Facility loans require a down payment or equity contribution of 15% and cannot exceed 85% of the value of the security offered.

4. Interest rates are fixed at 1% below the prime rate or 7-1/2% per annum whichever is less. The prime rate is set twice a year, on January 1st and July 1st of each year.

Emergency Loans are available to provide relief and rehabilitation due to environmental disasters, disease epidemics, and other economic emergencies. Emergency Loans are activated by declaration of a disaster by the Governor and are at an interest rate not less than 3% per annum. The Board of Agriculture determines the loan amount and terms. Qualified Farmers affected by State eradication programs may be eligible for a Farm Operating Loan at an interest rate of 3% to rehabilitate their farm operation. Soil and Water Conservation Loans are also available for water development and conservation purposes.

_Farm Ownership and Improvement loans _are for the purchase or improvement of farmland; construction, or improvement of essential farm buildings; liquidation of indebtedness of the foregoing purposes.

_Farm Operating Micro-Loans _are for the purchase of farm equipment and livestock; payment of production and marketing expenses including materials, labor, and services; payment of living expenses; liquidation of indebtedness incurred for the foregoing purposes.

• Micro Loan Application

• Personal Financial Statement

• Expense Projection Sheet

• Income Assumptions

• Monthly Cash Flow Projections

• Food Manufacturing Income Assumptions