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Combined Heat and Power Partnership

Value-Added Stock Loan Participation Program

dCHPP Glossary (PDF) (2 pp, 53K)

Date Last Updated11/16/2012
Incentive TypeLoan
State/FederalMN
Incentive Administrator/Contact OfficeMinnesota Department of Agriculture
Incentive Initiation Date1/1/1994
Incentive Size and Funding SourceThe Value-Added Stock Loan Participation Program is designed to help farmers finance the purchase of stock in certain types of cooperatives, limited liability companies or limited liability partnerships that will produce a "value-added agricultural product." In this program loans are made by individual financial institutions working with the Rural Finance Authority (RFA). The RFA purchases up to 45% of the loan principal, up to $40,000. The participant negotiates an interest rate, which may be a variable or fixed rate, for the non-RFA portion of the loan with a lender. The interest rate offered by the RFA is then set at a fixed rate of the lesser of 4.0% or half the lender's effective rate at closing. Loans are for a maximum of 8 years and interest-only payments are permitted for the first 2 years. Interest and loan principal repayments are deposited back into a revolving loan account. The RFA is not permitted to make stock loans cumulatively totaling more than $2 million for the financing of stock purchases in any one cooperative. The program will not finance more than 95% of the price of the stock purchased by the participant.
Eligible RecipientEligible applicants must be the following:
  • A resident of Minnesota.
  • A domestic family farm corporation or family farm partnership as defined in Minnesota Statutes 500.24, subdivision 2.
  • A grower of the agricultural product which is to be processed by an agricultural product processing facility.
  • Be able to demonstrate an ability to repay the loan.
Eligible FuelWoody Biomass; Biogas; Other
Eligible Project Size (MW)Does Not Specify
Minimum Efficiency Required (%)Does Not Specify
Other Selected Eligibility CriteriaTo qualify, an applicant may not have a total net worth exceeding $428,000 (as of July 2012, indexed for inflation), including the assets and liabilities of the applicant's spouse and dependents.
Application Form(s)Application Form
Resource Website(s)

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