Organic Farmer Loan Fund

June 2022

The Maine Organic Farmers and Gardeners Association is now accepting applications through September 30 to its Organic Farmer Loan Fund (OFLF) for the 2022 funding cycle. 

This fund is designed to help organic farmers and processors, particularly new and young farms and businesses, to build credit and relationships with a local bank, by guaranteeing funds to help cover business needs such as operating expenses, infrastructure or depreciable equipment expenses and/or provide bridge funding for expenses in certain reimbursement programs.

Equity statement

MOFGA is committed to creating a food system that is just and equitable for all. We look to design and utilize our farming programs, including this loan fund, as a tool to help farmers overcome barriers such as access to land, capital and education. MOFGA is committed to ensuring that access to this loan fund is available to farmers of all races, ethnicities, backgrounds and gender identities.

Is there any reason that access to this program or application is not accessible to you? For example, are you an English Language Learner, pre-literate or vision-impaired, or is there another reason that it is particularly difficult or culturally inappropriate for you to use this format? If yes, we will help you; please call or email Nicolas Lindholm: 207-505-5752 or [email protected].

Eligibility

Loans are available to:

Permitted Uses, Amounts, Rates & Terms

The loan fund will provide loan guarantees to small and medium-sized businesses seeking to expand or enhance their farm or processing operations. Loans may be established as either a fixed loan for a set amount of time or as an annually renewed working capital line of credit. Loan amounts are in the range of $2,000 to $25,000. Loan program interest rates will be determined by Bangor Savings Bank at the time of loan application and have been between 5% and 7.5% in recent years.

Here’s what farmers say about the OFLF

“A line of credit for my farm was the single biggest turning point in my farm being able to really pro-up. I started my farm with waaaaay too little money, so I was chasing my tail for years. Then I got the loan, and was able to grow the limit! I was able to spend money to make money! Like we all have to.” –Past borrower

“This program really was crucial for building a positive relationship with Bangor Savings Bank –it created the opportunity and ability to get more from the bank.” -Current borrower

“We still see a great need for what we needed, how we used this program: new/starting farms who have no way to access credit or capital, to build bigger, stronger financial resources and relationships, through a program that doesn’t require jumping through a crazy amount of hoops or have bad interest rates. Both the Line Of Credit and (MOFGA’s) guarantee are the best features to offer.” -Recent borrower who graduated out of the loan program

Application Review & Loan Closing

The application process has two steps.  Initial applications are made to Bangor Savings Bank; if the loan is turned down by the Bank, applicants then apply to the MOFGA Organic Farmer Loan Fund for a loan guarantee. Here is the Application Packet. OFLF applications will be reviewed by an advisory committee, which makes the final decision on the loans. Bangor Savings Bank will be administering the program, and the final loan agreement will be guaranteed by MOFGA and held by Bangor Savings Bank. Prior to closing, Bangor Savings Bank will submit a letter of commitment that will detail the closing requirements. MOFGA staff are available to assist in the process at any point –please reach out to us with any questions, concerns or considerations.

MOFGA, as well as the farmer, is at risk in this program. The advisory committee will be reviewing applications with an eye to the potential success of the applicant. 

Reporting

MOFGA reserves the right to require annual financial reports and/or  quarterly cash flow statements.

Application & Timeline

Contact the MOFGA office at 207-568-4142 or email [email protected] to establish your intention to apply to the loan fund. The Initial Application must be submitted to Bangor Savings Bank by Friday, September 30, 2022. If Bangor Savings Bank turns down the loan application, MOFGA will then provide and assist in completing the second step of the application packet for the OFLF.

For general questions about the Organic Farmer Loan Fund or the application process, please contact MOFGA’s Organic Business & Marketing Specialist, Nicolas Lindholm, at 207-505-5752 or [email protected] 

MOFGA is an equal opportunity lender.

* 7 CFR Part 205 National Organic Program Final Rule Section 205.101 (a)(1) (see page 398, part 205.101: “Exemptions and exclusions from certification.”)

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