Current through Register Vol. 49, No. 6, March 15, 2024
PURPOSE: This rule describes the operation of the
program; defines terms; and establishes the fee structure, applicant's
requirements, procedures for loan approval and collections, and conditions
under which amendments will be made.
(1) General Organization.
(A) The Missouri Agricultural and Small
Business Development Authority is authorized to borrow money and issue bonds,
procure insurance or guarantees from any public or private entities, receive
and accept from any source aid or contributions of money, property, labor, or
other things of value to be used to carry out its purpose, enter into
agreements with any department, agency, or instrumentality of the United States
or this state for the purpose of providing for the financing and refinancing of
any agricultural property and pollution control facilities or general property
for small businesses, and to make agricultural development loans, small
business loans, and small business pollution control facility loans.
(B) The authority will issue certificates of
guaranty covering a first loss guarantee up to fifty percent (50%) of the loan
on a declining principal basis made by lenders to independent livestock
producers to finance livestock production.
(C) All submissions or requests for
information regarding this authority should be directed to the Missouri
Department of Agriculture, Agricultural and Small Business Development
Authority, PO Box 630, Jefferson City, MO 65102.
(2) Definitions. As used in this rule, the
following terms shall mean:
(A) Authority
means the Missouri Agricultural and Small Business Development Authority
organized pursuant to the provisions of sections
348.005 to
348.225,
RSMo;
(B) Certificates of guaranty
means evidence of obligation of the authority to guarantee up to but no more
than fifty percent (50%) of the loan on a declining principal basis made by
lenders to independent livestock producers to finance livestock
production;
(C) Eligible borrower
means a borrower who is an independent producer qualifying for a loan through
the single-purpose animal facilities loan guarantee program;
(D) Eligible lender means any state or
national bank, federal land bank, production credit association, bank for
cooperatives, federal or state chartered savings and loan association or
building and loan association or small business investment company that is
subject to credit examination by an agency of the state or federal government,
or any other lending institution approved by the insurer or guarantor of an
agricultural development loan, small business development loan, or small
business pollution control facility loan which undertakes to make or service
such a loan;
(E) Independent
livestock producer (as used in this rule only) means any person who is engaged
in the production of poultry or livestock either owned or produced under
contract, but who is not an integrated cattle producer with over five thousand
(5,000) head feedlot capacity, or a swine producer with over one thousand two
hundred (1,200) sows, except if independent producers organize a cooperative
agreement to produce swine, the one thousand two hundred (1,200) sow limitation
would not apply;
(F) Single-purpose
animal facilities loan guarantee fund means a fund established in the state
treasury consisting of money appropriated to it by the general assembly,
charges, gifts, grants and bequests from federal, private or other sources, to
be used to guarantee up to fifty percent (50%) of loans made by lenders to
borrowers qualifying for loans through the single-purpose animal facilities
loan guarantee program;
(G)
Single-purpose animal facilities loan program fund means a fund established in
the state treasury consisting of fees charged to borrowers to be used, upon
appropriation, for administration of the single-purpose animal facilities loan
guarantee program; and
(H)
Single-purpose animal facilities loan means a collateralized loan to finance
the acquisition, construction, improvement, rehabilitation, or operation of
land, buildings, facilities, equipment, machinery, and animal waste facilities
used to produce poultry, hogs, beef or dairy cattle, or other
animals.
(3) Criteria
Relating to Participating Borrowers and Single-Purpose Animal Facilities Loan
Guarantee Program.
(A) Eligibility
requirements for securing loans include:
1. A
borrower must be an independent livestock producer who is at least eighteen
(18) years of age executing a note or other evidence of a loan;
2. Any project being financed must be used in
Missouri by residents of the state;
3. A borrower must make at least a ten
percent (10%) down payment on, or provide at least ten percent (10%) equity in,
the project being financed under the program. If the borrower is producing
poultry or livestock under contract, as assignment against the contract to the
lender may replace a part or all of the required equity other than the initial
ten percent (10%) down payment or equity; and
4. The eligibility of any person for a loan
guarantee under the program shall not be determined or otherwise affected by
any consideration of that person's race, religion, sex, creed, color, or
location of residence, other than the borrower must be a resident of the state
of Missouri at the time the loan is closed.
(B) Loans being guaranteed through the
program cannot exceed two hundred fifty thousand dollars ($250,000), except for
loans made by the authority through its animal waste facilities loan
program.
(C) Initial certificates
of guaranty cannot be issued for a period exceeding ten (10) years. Refinancing
of loans previously guaranteed by the Single-Purpose Animal Facilities Loan
Guarantee Program may extend the guaranty as approved by the Missouri
Agricultural and Small Business Development Authority.
(D) Loans made under the program may not be
assumed by another person(s) without the prior approval of the
authority.
(E) Loans made under the
program may not be assigned by the lender without approval of the
authority.
(F) Loans made under the
program may not be extended beyond the original time established for the loan
without prior approval of the authority.
(G) The authority will receive a loan
participation fee of one percent (1%), with the fee being collected from the
borrower by the lender and submitted to the authority at the time the loan is
closed.
(H) The authority will
receive a special loan guarantee fee of up to one percent (1%) per annum of the
outstanding principal which shall be collected from the borrower by the lender
and paid to the authority.
(I) The
rate of interest to be charged to a borrower will be negotiated between the
lender and the borrower, but cannot exceed the rate normally charged by the
lender for similar loans.
(J) The
loan amortization schedule will be negotiated between the lender and the
borrower. Payments may be repaid monthly, quarterly, semi-annually, annually,
or in installments that coincide with payments as they are normally received
for the products being sold or delivered.
(K) Borrowers may accelerate payments,
including early pay-off of the loan without incurring a prepayment
penalty.
(4) Procedure
for Making Eligible Loans.
(A) Independent
livestock producers wishing to secure a loan through the program must apply for
a loan from a participating eligible lender.
(B) A participating lender must make its own
determination of whether a prospective borrower meets its requirements for a
loan for which the lender will be applying for a loan guarantee.
(C) A lender seeking a guarantee through the
program must submit to the authority an application and any supporting
documents required by the authority.
(D) Upon receipt of the application and
supporting documents, the authority will determine whether the loan constitutes
a single-purpose animal facilities loan guarantee program loan and whether the
borrower is an independent livestock producer who meets the requirements
established by the authority.
(E)
Upon determining that all requirements for the loan guarantee are met, the
authority will issue to the lender a certificate of guaranty for up to fifty
percent (50%) of any loss of the loan amount on a declining principal basis,
and for a period not exceeding ten (10) years, except in the case of refinances
as approved by the authority.
(5) Procedures for Collecting Loans.
(A) Lenders must apply normal due diligence
procedures in the collection of loans guaranteed through the program.
(B) Lenders making the original loan shall
use its regular collection procedures prior to any action being undertaken by
the authority.
(C) After a lender
has foreclosed upon a borrower who has defaulted on a loan made through the
program, the authority will reimburse the lender for any loss up to fifty
percent (50%) of the principal outstanding.
(D) When the authority makes payment to a
lender for losses on a defaulted loan, the authority shall be subrogated to all
rights of the eligible lender.
(E)
After making a loan loss payment, the authority may institute action, including
the use of private collection agencies, to recover any amount due the
state.
(F) All monies received by
the authority for payments made on previously defaulted guaranteed loans shall
be paid promptly into the state treasury and deposited in the single-purpose
animal facilities loan guarantee fund.
(6) Amendments.
(A) Subject to the provisions of the Act and
the program, these guidelines may be amended from time-to-time in order to make
them conform to the provisions of the Act or the program or to facilitate the
making of single-purpose animal facilities loan guarantee program
loans.
(B) To the extent the Act or
the single-purpose animal facilities loan guarantee program is amended so that,
if applied, it would make the requirements in these guidelines less
restrictive, the program guidelines shall be deemed to be amended to
incorporate the amended provisions of the Act of the program.
*Original authority: 348.195, RSMo 1994, amended 2003;
348.210, RSMo 1994, amended 2003.