Meat and Poultry Intermediary Lending Program (MPILP)

The Minnesota Farmers Union Foundation is now accepting applications for $900,000 in revolving loans to support Minnesota’s small and medium-sized meat and poultry processors.

The money is through the Meat and Poultry Intermediary Lending Program (MPILP), which offers low-interest loans for the start-up, expansion and operation of slaughter and further processing of meat and poultry. MPILP is funded by a grant from United States Department of Agriculture Rural Development.

Loan terms

Loans of up to $100,000 are available at a 4% fixed interest rate with a term of up to 10 years. Funds can be used to purchase land or equipment, cover start-up costs, and make other business investments for expansion processes. Returned funds will be made available to new borrowers.

Interested borrowers

Interested borrowers can contact Minnesota Farmers Union by emailing dave@mfu.org or calling Dave Endicott at 218-821-8615.

You may also start by completing the initial intake form.

Eligibility and Limitations

MPILP loans are available to primary (slaughter) and secondary (cut, pack, further processing) meat processors.

Loans are available in the state of Minnesota.

Borrowers must comply with the state of Minnesota/or USDA Food Safety and Inspection Service.

Borrower must self-certify that it does not own a top-four market share in beef, pork, chicken or turkey processing and that the requested loan would not propel them into a top-four position.

Loan Uses

Interested borrowers are encouraged to discuss their project with a loan officer before applying and must identify any/all purpose(s) of the loan in their application. Recipients may use loan funds for any of the following purpose(s):
• Land purchase and development
• Purchasing equipment and machinery
• Equipping and building facilities leased to meat/poultry processors
• Leasehold improvements
• Pollution control and abatement
• Start-up costs and working capital
• Fees and expenses related to state and federal inspection
• Other investments related to worker and/or food safety
• Feasibility studies

Rate

Interest Rate: 4%

Loan Limits

$5,000 minimum loan

$100,000 maximum loan

Collateral

MPILP loans are collateralized by business assets.
• Real Estate: Maximum loan length of 10 years (Maximum 10-year amortization). (Please note: Strong collateral will not be sufficient to justify loan approval if repayment capacity cannot be established and documented.)
• Business Equipment & Assets & A/R: Depending on the life of the equipment — loan extended maximum of 5-7 years (exceptions based on equipment type). In general, terms will match the useful life of the business asset being financed.

Personal Guarantee

• Owners of borrowing entities (LLC, LLP, Inc, etc.) will be required to personally guarantee the loan to their business.

Fees

• $100 nonrefundable application fee
• 1% origination fee
• Borrower is responsible for all third-party fees associated with loan processing and collateral perfection

Underwriting Process

Loans will be underwritten based on historic and projected cash flows with the demonstrated ability to repay being the primary underwriting consideration. All loans require concurrence from USDA on underwriting recommendations.

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 Plan History and description of business, or Business Plan if a start-up. The description or business plan needs to address facility size, number of animals to be processed by week or day, availability of animals in proximity to the facility (with letters of interest and support from suppliers), who the meat will be distributed to (with letters of interest of buyers), competitors (where potential customers are currently taking their animals and pricing comparison), ownership, and management. Must also discuss the inspection type of daily inspection (state, federal).
• Business financial statements
• Year to date P&L
• Current business balance sheet
• Business tax returns
• Proof of business ownership
• Trade name registration, if applicable
• Schedule of sources and uses
• Proof of personal equity injection
• Business bank statements
• Personal financial statement
• Personal tax returns

Disclosures and Requirements

* The Federal ECOA prohibits creditors from discriminating against credit applicants on the basis of Race, Color Religion, National Origin, Sex, Marital Status, or Age (provided that the applicant has the capacity to enter into a binding contract); because all or part of the applicant’s income derives from any public assistance program, or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The Federal agency that administers compliance with this law is the Federal Trade Commission, Equal Credit Opportunity, Washington, DC 20580.
* Minnesota Farmers Union provides equal employment opportunities to all employees and applicants for employment and prohibits discrimination and harassment of any type without regard to race, color, religion, age, sex, national origin, disability status, genetics, protected veteran status, sexual orientation, gender identity or expression, or any other characteristic protected by federal, state or local laws.
This policy applies to all terms and conditions of employment, including recruiting, hiring, placement, promotion, termination, layoff, recall, transfer, leaves of absence, compensation and training.