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June 21, 2022   /   K. Lee Graham

The USDA’s new Food Supply Chain Guaranteed Loan Program is helping businesses across the US finance their expansion into middle-of-the-chain business activity.

Meat, dairy, and poultry processors immediately come to mind when this program is referenced. However, the Food Supply Chain Guaranteed Loan Program was created to serve a broad range of businesses related to food manufacturing.

Any business that supports the middle of the American food supply chain could be eligible for this financing. This does not include growers or producers, or retail stores and restaurants that sell food to consumers. Everyone else along the chain is potentially eligible.

Below, we’ve highlighted a list of companies that could consider the Food Supply Chain Guaranteed Loan Program for financing their food aggregating, manufacturing, processing, or distribution business.

Own a business we didn’t highlight? Check your eligibility for the Food Supply Chain Loan Program here.

Cold Storage Facilities

Cold storage facilities are crucial to keeping the food supply moving. Food must go from Point A to Point B without going bad for the chain to work. Companies that specialize in temperature-controlled trucks, warehouses, and containers may be eligible for financing under the Food Supply Chain Guaranteed Loan Program.

You may also qualify for financing if your current business is introducing cold storage to expand your services. For example, a bakery might build its own cold storage warehouse along its distribution route to increase capacity and reduce outsourcing costs. If the business meets basic eligibility requirements, the construction of the cold storage facility would be eligible for financing under this loan program.

Logistics Companies

The use of technology and data has revolutionized the food supply chain’s efficiency. Logistics companies across the US specialize in helping distributors along the chain reduce loss and maximize profits. Innovation in this field directly supports the overall health and efficiency of the chain. Food logistics companies could use this loan program to access working capital to help them invest in the right software, technology, and employees to grow their business.

Poultry, Dairy, & Meat Processors

Dedicated food processors are eligible for financing under this loan program. In fact, 19% of the funds available under the program are reserved exclusively for meat and poultry processors. Meat and poultry processors are an early link in the chain, but they are eligible because they support a middle-of-the-chain function: turning animals into a product.

One way a producer could be eligible for financing is by building a processing facility on-site. Like the cold storage example, this project would count as an expansion of current operations into middle-of-the-chain activity and would be eligible for financing.

Co-Packers

Contract Packing, or co-packing, continues to gain traction in the food manufacturing industry. Co-packers are contracted by food businesses to manufacture products according to the brand’s recipe. The co-packer may then package and label the product before shipping it to its next destination on behalf of your business.

Small businesses and brands can use co-packers to scale their operations. Your food business can streamline operations by relying on the co-packer’s efficiency and facilities to prep or make your product. Meanwhile, internal efforts can stay focused on running your side of the business. These co-packers allow for higher levels of production, resulting in fewer shortages or delays in food production. Co-packers could be a great applicant for this loan program, using the funds to increase capacity in their facilities, purchase new equipment, and hire more employees.

Transportation Companies

You’ve got to have some wheels to get your food product where it needs to go. Food service carriers are an essential part of the food supply chain and could utilize the Food Supply Chain Guaranteed Loan Program in a few different ways to grow or expand their capabilities.

Consider this: a transportation company begins offering logistics services and invests in cold storage equipment for their trucks. They may also invest in commercially available technology to help them operate more efficiently and sustainably. The transportation company could be eligible to finance all the above with the USDA Food Supply Chain Loan Program.

Commercial Food Wholesalers

Unlike retail stores, food wholesalers are still considered middle of the food supply chain because they help get products onto the shelves of retail stores. Wholesalers buy large quantities of product from manufacturers to resell to retail stores. They are closer to the end of the chain than other food supply chain businesses. However, these middlemen don’t sell directly to consumers so food wholesalers are still eligible for the Food Supply Chain Guaranteed Loan Program.

Food wholesalers could finance the purchase and construction of more storage facilities to house more product using this loan program. They could also renovate existing facilities, or convert a building to be suitable for another aspect of their business that supports the food supply chain.

Commercial Food Distributors

Distribution companies keep goods moving down the supply chain and prevent bottlenecks that could impact the entire chain. In addition to working with manufacturers and wholesalers, food distributors may handle food storage, and transportation. They might even supply marketing materials to retailers to help manufacturers sell more products. Food distributors could use the funding from this loan program to finance the purchase of additional equipment used in their operations or to open additional offices to scale their reach and capacity.

Developers & Contractors

You can’t manufacture food in just any building. Facilities need to be fully functional for your process while also meeting strict food safety requirements. Specialized contractors for food manufacturing facilities support the food supply chain by strengthening the infrastructure of businesses that can perform middle-of-the-chain functions while maximizing production capacity. Depending on their line of work and their clients, certain developers and contractors may be eligible for financing their business expansion through this program.

Food Marketing Companies in Contract with a Food Supply Chain Business

This may come as a surprise, but marketing companies that serve food supply chain businesses could be eligible for financing under the Food Supply Chain Guaranteed Loan Program. Businesses that perform services on a contract basis, like marketing agencies, are still part of the chain that helps move products from the farm to grocery store shelves. After all, how do you get your product in the right hands if no one knows about it?

A marketing agency or firm might use the Food Supply Chain Guaranteed Loan Program to hire new employees, invest in technology to better serve their customers, or access working capital to tide them over during lulls in between contracts. If you’re in the business of marketing food products, just be prepared to discuss your client portfolio and goals for serving more of the food supply chain with your lender.

Food Production Consulting Companies in Contract with a Food Supply Chain Business

Another type of business that could be eligible because of their contracted work is Food Production Consulting.  There are firms entirely dedicated to helping the food manufacturing industry to run with higher efficiency while maximizing profits. These consulting firms directly support the goal of the Food Supply Chain Guaranteed Loan Program and can use the financing to build out teams that help create a more diverse, more resilient, and stronger infrastructure for the American food supply chain.

Our food supply is dependent on a wide range of businesses working together to put fresh food on tables across America. How do you know if your business is a fit for this program specifically?

A good question to ask yourself: can you quantify how your project will increase your capacity to make the food supply chain more resilient, diverse, or secure? If you can put assign a numeric value to the positive impacts of the project that justifies how it supports the food supply chain, then you could be a fit for this program.

Check Your Eligibility for the Food Supply Chain Loan Program

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The Food Supply Chain Guaranteed Loan program is only available until the allocated funds run out.  Interested business owners should apply as early as possible to increase their chances of receiving funding. Contact us to schedule a meeting or phone call with one of our Food Supply Chain financing experts to discuss your options for financing.


About West Town Bank & Trust | As a top rural USDA lender, our mission is to help American businesses access the capital they need to grow. During each of the previous five fiscal years, West Town Bank & Trust has ranked as a top 10 USDA B&I and REAP lender in the country by total dollar volume, authorizing nearly $400 million in financing.