Meat & Poultry Processing Loans can be used to fund equipment, facilities, and working capital for existing, expanding, or start-up meat processors.
Eligibility and limitations
Loans are available to primary (slaughter) and secondary (cut, pack, value-added) meat processors. Processors must either be USDA inspected or have a plan to seek USDA inspection.
Custom exempt facilities are eligible for our small business loans, available at cfra.org/small-business-loans.
Loans are available in the state of Nebraska. Loans are also available regionally and nationally, depending on funding availability.
Use of Funds
Meat & Poultry Processing Loans will support the following loan purposes:
- Expansion of existing business
- Start-up of new business
- Real estate purchase
- Facilities update or expansion
- Equipment purchase
- Energy efficiency upgrades
- Purchase of an existing business
- Working capital
Loan examples
Here are three examples of how you can use our Meat & Poultry Processing Loans to expand your business.
Example 1: Borrower operates an existing slaughter facility and needs $100,000 to upgrade their Cryovac machine as well as other small equipment upgrades. A Meat & Poultry Processing Loan could finance the equipment upgrades with a 7-year fixed rate loan. Because the loan is smaller, fewer documents are required and the underwriting timeline is faster.
Example 2: Borrower has experience working in the meatpacking industry and wants to buy an existing small USDA-certified locker to prevent it from closing. The borrower needs $1,500,000 for the purchase as well as some upgrades. A Meat & Poultry Processing Loan could finance the $1,500,000.
Example 3: Borrower has operated an existing custom-exempt meat locker for many years. They have decided to build a new USDA-certified operation. Borrower needs $3,000,000 to complete the project. Their local bank is willing to lend them $2,000,000. A Meat & Poultry Processing Loan could finance the remainder of the $1,000,000 in partnership with the bank lender.
Rates and fees
Loans will have a rate that is equal to or less than what a particular project may qualify for elsewhere when considering loan risk, loan size, and related factors. As of March 2024, rates are anticipated to be between 5% and 7%.
In addition, Meat & Poultry Processing Loans may be charged a closing fee between 1% and 3% of the loan amount depending on loan size, loan complexity, and credit risk. There is no penalty for prepayment.
Terms
Amortization periods will be from 1 to 20 years based on the use of funds, with working capital or construction loans being available on terms from 1 to 3 years, equipment or facility upgrades on terms of 3 to 15 years, and construction or real estate on terms of 10 to 20 years. In general, terms will match the useful life of the business asset being financed. Longer term loans may utilize periodic balloon payments with option to refinance.
Loan limits and participations
Loans may range from $50,000 to $5 million. Participation loans with other lenders are encouraged, and may be required for larger projects.
Owner equity
In general, we require that an owner has made in the past or will make a financial investment in their business equal to a minimum of 10% to 20% of the requested loan amount. For start-ups, this will be a cash investment. For existing businesses, this may include past investments or accumulated operating equity.
Collateral requirements
Meat & Poultry Processing Loans are collateralized by business or personal assets. Applicants should be willing to provide collateral, but applicants who do not have adequate collateral to pledge will be considered. Strong collateral will not be sufficient to justify loan approval if repayment capacity cannot be established and documented.
Underwriting process
Loans will be underwritten based on historic and projected cash flows with demonstrated ability to repay being the primary underwriting consideration. All loans require concurrence from USDA on the underwriting recommendation.
Required documents
A partial list of required documents appears below. Each loan is unique, and additional documents may be required based on the circumstances of the loan.
- Business financials statements
- Business tax returns
- Proof of business ownership
- Schedule of sources and uses
- Business plan
- Personal financial statement
- Personal tax returns
- Environmental review, if required by USDA and by project
Interested borrowers can contact Meg Jackson at 402.309.9096 or megj@cfra.org. Or start by completing our initial intake form at this link or scroll down to fill it out.
The Center for Rural Affairs Meat & Poultry Processing Loans are established under the U.S. Department of Agriculture Meat and Poultry Intermediary Lending Program.
Is this loan for you?
Fill out our intake form and we will be in contact.
