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January 10, 2022   /   K. Lee Graham

Recent food supply chain disruptions highlight just how dependent the country is on the health of American agribusiness across the entire food supply chain. In November of 2021 beef prices rose more than 20% compared to the prior year while the prices of other meat, dairy, egg, and poultry products also surged. Meanwhile, meatpackers posted a reported 66% more open positions for workers, revealing labor shortages that could continue to exacerbate low inventories and the unsustainable strain on food processing industries.

To help support the growth of food supply chain businesses, the USDA announced the Food Supply Chain Guaranteed Loan Program, a lending program that makes loans of up to $40 million more accessible to food supply chain businesses.

This new Program aims to strengthen the Nation’s food supply by unlocking capital for food production businesses, helping them start or expand middle of the food supply chain operations.

In this article, we will breakdown the benefits available through the Program, who qualifies, and how to approach next steps to secure financing.

USDA’s Food Supply Chain Guaranteed Loan Program Overview

The USDA’s Food Supply Chain Guaranteed Loan Program, which began on December 9, 2021, makes capital more accessible and provides unique benefits to companies that are part of America’s food supply chain. Businesses that fit the eligibility requirements can receive loans of up to $40 million through the new Program. Short term, the loan program supplies cash to help food supply chain businesses grow their operations and meet the immediate need for relief. Long term, the loan program aims to support the growth of an infrastructure that nourishes small business owners as much as they nourish us.

Applications are currently open, and loans will be awarded starting February 7, 2022.

What Are the Benefits Available Through the Program?

This Program provides unique benefits to food supply chain businesses, including:

  • Flexible Loan Terms
  • No Guarantee Fees for Borrowers
  • Longer Repayment Periods Compared to Conventional Loans
  • No Geographic Eligibility Requirements

Who Is Eligible for The Food Supply Chain Loan Program?

Business owners are qualified for one of these government guaranteed loans if they meet all the following eligibility criteria set by the USDA:

  • The borrower must be a legal and operational entity, whether for profit or nonprofit. This includes Federally recognized tribal groups, public bodies, and individuals.
  • The business must be a part of or propose to be a part of the food supply chain system at a commercial level. This includes businesses that aggregate, process, manufacture, store, transport, distribute, and/or sell food wholesale.
  • Borrowers must meet food safety and labeling standards in full compliance with USDA Food Safety and Inspection Service, FDA, and their state of local government.

The loans are specifically intended to address the growing strain on meat and poultry processing, but all food processing businesses are eligible. This includes companies that provide contract based labor or service agreements to food supply chain businesses. For example, packaging suppliers or marketing companies that service businesses in food supply could be eligible. Borrowers can be located in either rural or urban areas.

Commercial hemp related businesses are eligible if they meet the above criteria and have a valid license issued from an approved State, Tribal or Federal plan in order to meet USDA eligibility for this loan program.

How Can the Funds Be Used?

Food supply chain USDA loans can be used to start or grow operations at the middle of the food supply chain. These operations include:

  • Business conversion, enlargement, repair, modernization or development
  • The purchase or development of land, buildings or other infrastructure
  • The purchase and installation of machinery and equipment, including IT systems
  • Building or equipping facilities for lease to enterprises engaged in commercial or industrial operations
  • Refinancing as long as the amount totals 50% or less of the total loan funds secured
  • Working capital

Essentially, the funds can be used to grow your company’s abilities to increase the efficiency of your services and expand offerings. For example, a small meat processor might use the capital to repair and expand their facilities. Whereas a regional poultry processor may purchase new equipment to help streamline their plant.  It is always recommended that you speak with a lender experienced in USDA lending, as they will be able to identify whether your plans on how to use the loan funds will qualify under the USDA guidelines.

Applying for a Food Supply Chain Guaranteed Loan Through West Town Bank & Trust

As an essential part of our economy, your food supply chain business may be eligible to take advantage of the timely benefits offered by a USDA Food Supply Chain Government Guaranteed loan. Working with a lender experienced in USDA and small business lending, like West Town Bank & Trust, can help you efficiently navigate the process of applying and ultimately securing a loan.

Growing a competitive and healthy food supply chain creates a more sustainable system that is more accessible to small businesses and consumers. West Town Bank & Trust is proud to serve small business owners, helping them access affordable capital when they need it most. Use the contact form below to speak to an expert who can guide you through the application process.


About West Town Bank & Trust | 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 collectively during this period.

Contact Us Today to Start Your USDA Loan Application

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