KAFC Horticulture Incentives Loan Program (HILP) (HILP)

The Horticulture Incentives Loan Program (HILP), offered by the Kentucky Agricultural Finance Corporation (KAFC), assists specialty crop producers with access to working capital.

KAFC will loan up to 50% of the project cost, not to exceed $250,000. If the applicant has existing agricultural debt with the participating lender and/or FSA, that debt can be used as match so that KAFC can participate up to 100% of project costs; otherwise KAFC is limited to 50%. Priority consideration is given to borrowers with agricultural education and/or experience. The borrower must be a Kentucky resident and the primary operation must be in Kentucky.

The interest rate on the KAFC portion is fixed at 2% a.p.r. for the life of the loan; the lender services the loan for no more than 0.75% (75 basis points). The KAFC maturity date is December 31st of the year the application was submitted. Borrowers are limited to 10-year lifetime eligibility of the program and to a $250,000 balance in HILP. The loan must be secured with real estate, fixed assets, or equipment (and the specialty crop), with a combined loan-to-value no greater than 85%. Borrowers must submit a business plan and carry NAP, Whole-Farm Revenue Protection, Micro Farm insurance, or other approved specialty crop insurance; new vegetable producers must have a contract with a buyer (waived after 3 years of production). There is no prepayment penalty. Eligible projects include seasonal working capital and other agricultural investments at the discretion of the KAFC Board.

Apply through a participating Kentucky lender. Contact Bill McCloskey, (502) 382-6093 or kafc@ky.gov.