Methane Digester Loan Program

The MDA developed the Methane Digester Loan Program in 1998 to help supplement the funds needed for livestock producers in Minnesota to begin installing digesters on their farms (see Session Laws 2002, Minn. Stat. 41B.049).

The purpose of the program is to help finance the purchase of necessary equipment and the construction of a system that will use manure to produce electricity. The State of Minnesota has established a revolving loan fund to appropriate funds for this program. The Rural Finance Authority (RFA) of the Minnesota Department of Agriculture may participate with a local lender or make a direct loan to a farmer who is eligible for the biogas loans.

To be eligible for a loan under this section, a borrower must:

• Locate the projects and use the equipment and practices on a farm in Minnesota.

• Provide evidence of financial stability.

• Demonstrate an ability to repay the loan.

• Provide evidence that the practices implemented and capital assets purchased will be properly managed and maintained.

A borrower who has previously received a loan under subdivision 1 may receive another methane digester loan under subdivision 1 if the previous loan has been repaid in full.

• No loan participation or direct loan may exceed $250,000.

• Loans made under this program are currently no-interest loans (the RFA brochure's quick-reference table lists a 0% interest rate, 1-10 year terms).

• Standards for loan amortization are set by the RFA, not to exceed ten years.

• Security for the loans must be a personal note executed by the borrower and whatever other security is required by the eligible lender or the RFA.

• No loan proceeds may be used to refinance a debt existing prior to application.

• Loans under this program may be used as a match for federal loans or grants.

• There is a $100 non-refundable application fee due with the application.

Application for a loan participation or direct loan must be made on forms prescribed by the RFA — contact the Rural Finance Authority at 651-201-6004 or RFA.Loans@state.mn.us to obtain the application. The RFA may participate with a local lender or make a direct loan to the farmer; participating lenders can be searched by county on the MDA's List of Participating Lenders. There is a $100 non-refundable application fee due with the application.

• Rural Finance Authority (RFA) program hub

• List of RFA Loans

• List of Participating Lenders

• RFA Loan Brochure (PDF)

• Loan Comparison Chart

• Approved Farm Business Management Programs