• An individual that will use the loan proceeds to establish or expand an agricultural business in Texas.

• Meet the lender’s underwriting criteria.

• The borrower(s) should have:

  • A credit score of 650 or greater

  • Equity contribution of at least 15% of the loan amount

  • Debt to equity of 2:1 or less

  • Debt service coverage of 1.25 or better

Eligible Lender:

Application Process:

• The application is a joint application for the Lender and the Borrower.
• The completed (but unsigned) application is submitted to TDA for review via email at EconomicDevelopment@TexasAgriculture.gov.
• Upon initial review for eligibility, TDA staff will distribute the application via DocuSign for electronic signatures by all parties.
• If approved, the Lender, the Borrower and TDA will sign an Agricultural Loan Guarantee Agreement which will be part of the loan closing documents.
  
  ** The lender may schedule loan closing at any time, however once the guarantee application has been approved an approval letter will be sent, valid for 30 days. 

Use of Funds:
A loan guarantee recipient may use loan proceeds for any agricultural related purpose, including:

• Working capital,

• Lease of facilities,

• Purchase of machinery and equipment, and/or

• Purchase of real estate, as identified in recipient’s documentation submitted in support of the application.

Fees:

• Application Fee: $100 (non-refundable) due at the time of application

• Origination Fee: A minimum of 1% of the guaranteed amount due within 10 days of loan closing.
  
  

Interest Rebate:
Borrowers under the ALG program may be eligible for a rebate of a portion of the interest they pay on the loan. The maximum annual rebate is $500 and shall not exceed the 1% origination fee over the term of the guarantee. The interest rate rebate may be adjusted by TAFA within statutory limits. 

The Lender is responsible for submitting a quarterly report confirming outstanding loan details.