Agricultural Marketing Loan Fund Program Description
The
Agricultural Marketing Loan Fund (AMLF) provides low cost financing to
help farmers, food processors and aquaculture operations adopt new and
innovative equipment and facilities in order to improve and enhance the
manufacturing, marketability and production of Maine products.
Funds may be used for the design, construction or improvement of commodity
and storage buildings and packing and marketing facilities, or for the construction,
renovation or acquisition of land, buildings, equipment, docks, wharves, piers,
or vessels, located in the State of Maine and used in connection with an agricultural
enterprise, including, but not limited to: land acquisition (when the land
purchase is: (a) for the purchase of land in connection with development of
new cranberry acreage; (b) for the purchase of land for irrigation reservoirs
or to provide direct access to water for irrigation; (c) for the purchase of
land necessary for the start-up of a new agricultural enterprise; or, (d) for
the expansion of an existing agricultural enterprise when the land acquisition
is necessary to comply with land use regulations); land improvements; purchase
and remodeling of existing buildings; building construction, additions or renovations;
leasehold improvements; purchase and installation of machinery and equipment
(both traditional, new and innovative).
Funds may not be used for working capital, to finance or refinance projects
commenced prior to issuance of a commitment for the AMLF loan, for non-project
related equipment, for the refinancing or acquisition of projects for which
a loan from the Potato Marketing Improvement Fund was obtained and it may not
be used for interim financing during the construction of projects.
An eligible applicant must be an "Agricultural enterprise" meaning
a person or business, located in Maine, engaged in the commercial
growing or harvesting of plants; raising of animals; growing or obtaining
plant or animal by-products, aquaculture, as defined in Title 12,
section 6001, subsection 1; or further processing, storing, packaging
or marketing a raw product derived from plants, animals, plant or
animal by-products or aquaculture as defined in Title 12, section
6001, subsection 1, with the intent that the product be sold or otherwise
disposed of to generate income. "Agricultural enterprise" shall
also include a business or activity that attracts visitors to a farm
for the purpose of supplementing income from the primary crop or
livestock operation. "Agricultural enterprise" does not
include a business engaged primarily in the growing, harvesting or
further processing of forest species of trees for the purpose of
producing pulp or other materials used in the paper manufacturing
or wood manufacturing process.
The ALMF Program provides loan funds of 90% of total project cost, if
project cost is $100,000 or less or 75% of total project cost if project
cost in more than $100,000. In both cases the borrower must inject 10%
equity in the form of cash or in-kind services. Maximum loan amount is
$250,000. The interest rate is set at 5% for the life of the loan. An
origination fee of 1% is charged at closing for all AMLF Loans greater
than $100,000. The Borrower is responsible for all legal costs of closing
the AMLF Loan. The term and payback provisions are negotiable and vary
with the useful life of the assets being financed.
The Department will seek adequate collateral to fully cover the amount of the
loan, whenever possible. This collateral typically includes the project being
financed and may also include other real estate, machinery and other items
acceptable to the Department. The Department will also require financial statements
and business plans that show the potential for the loan to be cash flowed over
the term of the loan period.
YOUR LENDER IS VERY IMPORTANT. Typically lead lenders provide a loan to cover
the balance of the project costs that AMLF or owner's cash equity does not.
Also, AMLF does not finance the construction phase of any project — usually
the lead lender provides the construction loan.
Individuals or entities considering an application to the Agricultural Marketing
Loan Fund should contact the Maine Department of Agriculture to determine project
eligibility and/or to request a loan application package when funds become available. Upon determining project eligibility, the Maine Department of Agriculture will
forward copies of the complete loan application package to the Finance Authority
of Maine for financial review and credit analysis.The Finance Authority of
Maine is responsible for reviewing all loan applications for
completeness and credit underwriting. The Commissioner of Agriculture makes
all final decisions regarding approval of a loan.
Staff of the Maine Department of Agriculture and the Finance Authority
of Maine may be contacted here:
Agricultural Marketing Loan Fund Program Specialist
Maine Department of Agriculture Food & Rural Resources
28 State House Station
Augusta, ME 04333
TEL: (207) 287-7620
FAX: (207) 287-5576
E-mail: amlf@maine.gov
Finance Authority of Maine
5 Community Drive
P.O. Box 949
Augusta, ME 04332-0949
TEL: (207) 623-3263
FAX: (2070 623-0095
Website:www.famemaine.com
