Agriculture Loans for Alaska Farmers
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ABM-00240
Agriculture Loans for
Alaska Farmers
Sources of financing for Alaska agriculture enterprises
This publication contains information on sources Agricultural Loans
of financing for agricultural producers in Alaska.
It describes lending programs and their purpose, • Agricultural Revolving Loan Fund (ARLF)
borrower eligibility requirements, loan types, loan • Alaska Rural Rehabilitation Corporation
terms and contact information. To learn how a (ARRC)
program might fit the needs of an individual enter- • Northwest Farm Credit Services (Northwest
prise, readers should speak with a loan officer. FCS)
• Farm Service Agency (FSA)
Loan programs change, so this information will • Alaska Commercial Fishing and Agriculture
become out-of-date with the passage of time. For Bank (CFAB)
current information, prospective borrowers should • Related Organizations and Additional Resources
use the contact information for each program or for Alaska Agriculture and Rural Development
request assistance from their local Cooperative
Extension Service office. While each of these programs provides agriculture
loans, they are different in the types and purposes
We offer this bulletin as an introduction to the
for which they lend. An understanding of each pro-
credit options available to Alaskans. Borrowing
gram is essential to avoid wasted time and effort.
can determine the success or failure of a business
enterprise. We hope that this information will help The following summary provides a better under-
Alaskans make choices that will maximize their standing of each loan program. Contact your local
chances for success. banker for additional sources of financing for farms
in Alaska.Agricultural Revolving Loan Fund Payment Terms
(ARLF) Loan terms will be based on a borrower’s ability to
service the loan. Payments may be monthly, quar-
The purpose of the ARLF is to promote the devel- terly, semi-annual or annual.
opment of agriculture as an industry throughout
Alaska by means of moderate interest rate loans. Interest Rates & Fees
Loan applications must be submitted on ARLF Fixed interest rates are comparable to rates charged
forms. After ARLF staff evaluation, they are sub- by other Alaska agricultural lenders and established
mitted to the Board of Agriculture and Conserva- by the Board of Agriculture and Conservation. A
tion for consideration at the next scheduled meet- $50 non-refundable application fee is required.
ing. Contact
Eligibility State of Alaska
Applicants must provide a description of their Division of Agriculture
business and agricultural experience. Loans may Agricultural Revolving Loan Fund
be made to individual Alaskans, partnerships, joint 1800 Glenn Hwy., Suite 12
ventures, corporations or other business entities. Palmer, AK 99645-6736
Proof of current Alaska residency must be pro- Phone: 907-745-7200
vided. Fax: 907-745-7242
Conditions Website: dnr.alaska.gov/ag/ag_arlf.htm
Loan funds may only be used for agricultural pro-
duction or processing operations in Alaska.
Collateral
Loans must be secured by collateral acceptable to
ARLF and may not exceed 75 percent of appraised
collateral value. Collateral may include land, im-
provements, machinery, equipment, crops or live-
stock.
ARLF LOAN TYPES PURPOSE MAXIMUM LOAN MAXIMUM TERM
Farm Development purchase/construct land and buildings $1,000,000 30 years — 4.50%
(nonresidential)
Chattel purchase equipment or livestock $1,000,000 7 years — 4.00%
Short-term operating expenses $200,000 1 year — 3.00%
Irrigation equipment purchase and installation $1,000,000 30 years — 4.50%
Product Processing build and equip processing facilities $250,000 30 years — 4.50%
Clearing land clearing $250,000 20 years — 4.50%
Total outstanding balances of ARLF loans for a borrower may not exceed $1,000,000.
2Alaska Rural Rehabilitation Interest Rates & Fees
Corporation (ARRC) Competitive fixed-interest rates are established by
the board of directors. A $100 nonrefundable ap-
ARRC is a nonprofit corporation dedicated to the plication fee that includes the cost of a credit report
permanent development of Alaska agriculture. It is required. Additional fees may be charged for pre-
was originally created to support the Matanuska liminary title report ($250) UCC-1 fees ($20) and
Valley colonization project in 1935. It now provides any other costs that are required to properly place
financing for Alaskan agricultural producers. ARRC in first lien position.
Eligibility Contact
Applicants must provide evidence of business Alaska Rural Rehabilitation Corporation
experience and Alaska residency. Loans may be to 248 E. Dahlia Ave.
individuals, partnerships, joint ventures, corpora- Palmer, AK 99645
tions or other business entities.
Phone: 907-745-3390
Conditions Fax: 907-746-3555
Loan funds may only be used for agricultural pur- Email: arrc@mtaonline.net
poses in Alaska. Website: arrc.us/loans
Collateral
In Alaska, loans must be secured by collateral ac-
ceptable to ARRC and may not exceed 70 percent
of appraised collateral value. Collateral may include
equipment, machinery, land, improvements, boats,
motor homes and vehicles, but not crops or ani-
mals.
Payment Terms
Payment terms will be based on a borrower’s ability
to service the loan and may be monthly, quarterly,
semi-annual, annual or variable.
ARRC LOAN TYPES PURPOSE MAXIMUM LOAN MAXIMUM TERM
Chattel purchases of new and used farm equipment none 7 years — 5–9%
Real Estate purchases of land, buildings and equipment none 20 year — 5–9%
Future Farmers promote a working knowledge of agriculture none 5 years — 5–9%
10–25 years of age
Line of Credit any farming use none 5 years — 5–9%
3Northwest Farm Credit Services Interest Rates & Fees
(Northwest FCS) Northwest FCS offers a variety of interest rate and
fee programs depending on the loan purpose,
Northwest Farm Credit Services (Northwest FCS) repayment terms, risk level and flexibility you need.
is a customer-owned financial cooperative pro- Loan structures and repayment plans largely deter-
viding nearly $12 billion in financing to farmers, mine eligible rate programs.
ranchers, agribusinesses, commercial fishermen,
timber producers and country home owners as well Contact
as farm-related businesses, agricultural coopera- Northwest FCS-AgVision
tives and rural utilities in Idaho, Montana, Oregon, 629 South Market Blvd.
Washington and Alaska. Its AgVision program P.O. Box 420
provides financing for young, beginning or small Chehalis, WA 98532-0420
producers through flexible underwriting standards Phone: 360-767-1100
and competitive interest rates. Fax: 360-1105
Eligibility Toll-Free: 800-642-9005
Applicants may be part-time farmers, full-time Website: www.northwestfcs.com/products-and-
farmers, young and beginning producers, com- services/real-estate-financing
mercial operations, and large, vertically integrated
businesses.
Collateral
Loans are secured by collateral acceptable to North-
west FCS. Collateral may include land, improve-
ments, equipment, machinery, commercial fishing
vessels, crops, livestock, feed or inventory.
Payment Terms
Payment terms will be based on product type and
may be monthly, quarterly, semi-annual, annual or
variable.
PRODUCT TYPES PURPOSE MAXIMUM LOAN TERM
Operating Loan or Line of operating expenses none 1–3 years
Credit
Chattel purchase of new or used farm machinery or none 1–10 years
equipment, livestock or other eligible items
Real Estate purchase or refinance of land, home, buildings none 5–25 years
and equipment
JumpStart start-up capital for equipment purchase, real $100,000.00 5 years
estate down payment or operating expense
RateWise accumulate credits after attending manage- N/A N/A
ment training experiences to reduce interest
rates on new loans; free registration for every-
one on the website
4Farm Service Agency (FSA) FSA also makes and services direct Farm Owner-
ship (FO) and Operating Loans (OL) in addition to
The Farm Service Agency (FSA) is responsible for providing credit counseling and loan supervision.
overseeing and implementing policies and pro-
cedures that regulate the delivery of federal farm Contact
programs. USDA Farm Service Agency
www.fsa.usda.gov/FSA/stateoffapp?mystate=ak&ar
Nonrecourse Marketing Assistance Loans: Non- ea=home&subject=landing&topic=landing
recourse marketing assistance loans allow a pro-
ducer growing eligible crops to store production Alaska State Office
and use the loan proceeds to meet cash flow needs 800 West Evergreen Ave, Suite 216
without selling the crop. Crop is used as collateral Palmer, AK 99645
for the loan. Phone: 907-761-7738
Farm Storage Facility Loans: Low interest financ- Southern Service Center
ing to producers to build or upgrade farm storage 800 West Evergreen Ave, Suite 216
and handling facilities for eligible commodities that Palmer, AK 99645
include grains, hay, fruits and vegetables. Phone: 907-761-7754
Farm Loan Program Northern Service Center
Two types of financing are offered in this program: P.O. Box 585
guaranteed loans and direct loans. FSA-guaranteed Delta Junction, AK 99737
loans provide conventional lenders with up to a 95 907-895-4242
percent guarantee of the principal amount of loans
made to agricultural producers. Farmers interested
in this program must first apply to a conventional
lender, who then arranges for an FSA guarantee.
FSA LOAN TYPES PURPOSE MAXIMUM LOAN MAXIMUM TERM
Direct Farm Ownership purchase land, construct buildings/ $300,000 40 years
improvements, soil and water
conservation
Beginning Farmer Down purchase a farm or ranch $300,000 20 years
Payment Farm Ownership
Direct Operating purchase livestock, poultry, equipment, $300,000 1 to 7 years
feed, seed, supplies; soil and water
conservation; farm chemicals,
insurance, refinancing
Microloan same as Direct Operating $50,000 1 to 7 years
simplified application process
Direct Emergency See FSA for details in the event of a
(drought, flood and natural natural disaster declaration in your
disasters) area.
Guaranteed Operating same as Direct Farm Operating with $1,355,000 adjusted annually for 1 to 7 years
addition of refinance option inflation
Guaranteed Farm same as Direct Farm Ownership with $1,355,000 adjusted annually for 40 years
Ownership addition of refinance option inflation
5Alaska Commercial Fishing and Interest Rates
Agriculture Bank (CFAB) Rates are variable and are determined by the col-
lateral and the credit strength of the borrower. As a
Alaska Commercial Fishing and Agriculture Bank cooperative, CFAB returns a share of its profits to its
(CFAB) is a private member-owned cooperative borrowers through patronage and dividend pay-
providing financing to Alaskans and Alaskan- ments.
owned businesses serving the commercial fishing,
agriculture, timber, tourism and resource-based Purpose
industries of Alaska. CFAB is an authorized lender Any commercial purpose.
for two important federal entities, the U.S. Export- Contact
Import Bank (EXIM) and the U.S. Department of CFAB
Agriculture (USDA) Rural Development Business P.O. Box 92070
and Industry guaranteed loan program (See USDA Anchorage, AK 99509-2070
Rural Development in this publication). CFAB is
the only Alaska lender approved by EXIM bank. 3040 Lakeshore Drive
Anchorage, AK 99517
Eligibility
Alaska resident. Phone: 907-276-2007 or 800-544-2228 (outside
Anchorage)
Loan Amount Fax: 907-279-7913
The loan amount is generally based on the pro- Email: cfabanch@gci.net
jected needs, profitability and credit worthiness of Website: www.cfabalaska.com
the borrower.
Terms
The length of the loan may range from 1 to 20
years. Loans are structured to the specifics of the
credit.
6Additional Rural Assistance and telecommunications. Rural Development is an
Organizations and Programs agency of the U.S. Department of Agriculture and
provides rural utilities programs, rural housing
Alaska Housing Finance Corporation programs and rural business cooperative programs.
(AHFC) It also contains the Office of Community Develop-
Alaska Housing Finance Corporation (AHFC) of- ment. USDA Rural Development is committed to
fers a variety of loan programs, including loans for the future of rural communities.
single-family and multi-family housing and loan
options and other programs for both urban and Contact
rural areas. Rural options include the (1) the Rural USDA Rural Development Alaska State Office
Non-Owner-Occupied Loan Program and (2) Rural 800 W. Evergreen, Suite 201
Owner-Occupied Loan program. These programs Palmer, AK 99645-6539
offer terms that are intended to address the often Phone: 907-761-7705
unconventional needs of Alaskans living in small Fax: 907-761-7783
communities. The AHFC also provides information Website: www.rurdev.usda.gov/RD_loans.html
through its Research Information Library as well as
publications about log building construction and an Alaska Economic Development Resource
Alaskan Housing Manual. This program also over- Guide
sees the comprehensive weatherization of homes in The Alaska Economic Development Resource Guide
rural Alaska. is designed to bring together in one place an in-
ventory of programs and services that can provide
Contact economic development assistance to Alaska commu-
AHFC nities and businesses.
P.O. Box 101020
Anchorage, AK 99510-1020 Federal and state agencies as well as national and
Alaska private nonprofit agencies are represented.
Phone: 907-338-6100 or 800-478-2432 This directory primarily describes those programs
Fax: 907-338-9218 that focus on the creation and support of new indus-
Website: www.ahfc.us/buy/loan-programs/rural- tries, businesses and long-term jobs. It is designed
programs to help communities match their economic develop-
USDA Rural Development (USDA-RD) ment strategy with existing program resources that
The USDA-RD mission is to help rural Alaskans could support that strategy.
create, build and sustain ventures within communi- Contact
ties and to see that all federal, state, nonprofit and Division of Community and Regional Affairs
private sector programs are accessible to residents Department of Commerce, Community and
of rural Alaska, regardless of the size of the com- Economic Development
munity. Rural Development does this by helping 550 West 7th Ave., Suite 1770
rural individuals, communities and businesses Anchorage, Alaska 99501-3501
obtain the financial and technical assistance needed
to address their diverse and unique needs. Phone: 907-269-4501
Fax: 907-465-4286
Rural Development operates federal loan and grant Website: commerce.alaska.gov/dnn/portals/4/pub/
programs designed to strengthen rural Alaska busi- edrg2009.pdf
nesses, finance new housing, improve existing rural
housing, develop community facilities and stimulate Resource Guide is available on CD as an adobe ac-
rural employment. Direct and/or guaranteed loans robat file. Please send request to the above address.
are available for housing, water and waste, rural
businesses, community facilities, electric power
7USDA Rural Information Center (RIC) Contact
The Rural Information Center (RIC) provides infor- Rural Information Center
mation and referral services to local, tribal, state and National Agriculture Library
federal government officials; community organiza- 10301 Baltimore Avenue, Room 132
tions; rural electric and telephone cooperatives; li- Beltsville, MD 20705-2351
braries; businesses; and citizens working to maintain
the vitality of America’s rural areas. Phone: 800-633-7701
Fax: 301-504-5181
The RIC website contains links to current and reli- Website: www.nal.usda.gov/rural-development
able information on a wide variety of rural resourc-
es and funding sources, including Rural Funding
Sources and Federal Funding Sources for Rural
Areas Database.
www.uaf.edu/ces or 1-877-520-5211
Anthony Nakazawa, Extension Economist, and Kathryn Dodge, Extension Economic Development Specialist
Published by the University of Alaska Fairbanks Cooperative Extension Service in cooperation with the United States Department of
Agriculture. The University of Alaska Fairbanks is an affirmative action/equal opportunity employer and educational institution.
©2015 University of Alaska Fairbanks.
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