1410 Forest Drive, Suite 21
Annapolis, MD 21403
Office 410-267-6807, Fax 410-267-6809
General Info: firstname.lastname@example.org
The primary mission of MARBIDCO is to assist Marylandís farm, forestry,
and seafood businesses to achieve profitability and sustainability
by providing targeted services that help retain existing Ag/RBI production and
commerce, promote rural entrepreneurship, and nurture emerging industries.
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Over a period of many years, the Stateís agricultural, forestry, and seafood
industries have been steadily declining while at the same time Marylandís rural
working landscapes have also been disappearing. To help remedy this situation,
in 2004 the Governor and General Assembly established the Maryland Agricultural
and Resource-Based Industry Development Corporation (MARBIDCO) as a quasi-public
corporation broadly authorized to:
1. Develop Agricultural industries and markets;
2. Support appropriate commercialization of agricultural processes and technology;
3. Assist with rural land preservation efforts; and
4. Alleviate the shortage of nontraditional capital and credit available at affordable interst rates for investment in agricultural and resource-based businesses.
In short, MARBIDCOís mission is to help Marylandís farm, forest, and seafood
businesses achieve sustainable viability and profitability now and into the future.
Recently, with Marylandís rural heritage industries under
continuing threat from global market competition and land development pressure,
sustainable public investment in MARBIDCO became a top priority for the State.
Developed with input from a number of stakeholders, MARBIDCOís ďcoreĒ loan and
business development programs are designed to uniquely help fill an important rural
development void. Thanks to the strong support of The Governer and General Assembly, the FY2009 State Budget includes $3.25 million for MARBIDCOís
core programs, with additional annual funding in the $3-4 million range expected
to be provided going forward.
In addition to the core development programs, the Maryland General Assembly has authorized MARBIDCO to assist with rural land preservation.
With a significant financial investment from the State now available, the MARBIDCO
Board of Directors has approved the offering of eight targeted low-interest loan
and rural business development programs this year that are designed to take full
advantage of the Corporationís nimble and strategic capability to leverage
affordable rural business financing, assist with alternative or value-added
enterprise development, and support the next generation of producers. A special focus of the corporation is assisting innovative
business enterprises and start-up operations which tend to have a level of risk
exposure that commercial lenders find unacceptable without third-party participation
or mitigation. This is where the MARBIDCO programs can be of tangible benefit to
rural entrepreneurs and commercial lenders alike.
Examples of innovative business activities and enterprises include on-farm and
value-added food processing, niche product development and marketing, smaller
scale secondary wood products manufacturing, and business-related technology
enhancements (especially those related to energy efficiency). The Corporationís
aim is to help agricultural and resource-based businesses to innovate, diversify
and exploit emerging market opportunities in food and fiber production and in rural
tourism and recreation.
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Summary Description of
MARBIDCO’s Rural Business Development
& Working Land Conservation Programs (FY 2016)
“Core” Rural Business Lending Programs
√ The Maryland Resource-Based Industry Financing Fund offers low-interest (3.25% APR initially) loans to Ag/RBI-industry firms for the purchase of land and capital equipment for production and processing activities (or farm projects that provide a water or air quality benefit). The maximum MARBIDCO loan amount is $200,000 for acquisition of equipment and fixed assets, $400,000 for real estate purchases and $600,000 for large-scale food/fiber processing projects. Value-added and niche market-oriented projects are particularly encouraged, as are the projects of beginning or transitioning producers and processors. MARBIDCO provides up to 50% of financing needed for a project, and a commercial lender and/or a public instrumentality must also have an equal financial commitment in any transaction. (Note: MARBIDCO typically takes a subordinate lien position on the required collateral security with MRBIFF loans.)
√ The Rural Business Equipment and Working Capital Loan Fund offers low-interest (5% APR) loans to Ag/RBI-industry firms and producers for working capital and equipment purchases. The maximum loan amount is $75,000. A letter of referral from a commercial lender is required.
√ The Maryland Vineyard Planting Loan Fund offers low-interest (3-5% APR) loans to help meet the unique financing needs of Maryland’s rural landowners wanting to plant grapes and develop wineries. Also eligible for financing under this program is the planting of tree fruit orchards and hop yards. The maximum loan amount is $100,000 and an interest only option is available. A letter of referral from a commercial lender is required as well as a site evaluation approval letter from the wine/grape industry’s viticulture committee (or other appropriate university expert). The requested financial assistance from MARBIDCO must relate to the installation of new vineyards, fruit orchards or hop yards, including, but not limited to, the prepping of land for installation, purchase of vines or fruit trees, equipment and supplies. The purchase of tractors, pick-up trucks, and wine-making equipment are not eligible for financing under this particular program.
√ The Forestry Equipment and Working Capital Loan Fund offers low-interest (5-10% APR, depending on the level of credit and collateral risk) loans to Maryland’s forest products businesses with respect to working capital and equipment purchases. The maximum loan amount is $150,000. In a special effort to better serve the forest products industry in Maryland, MARBIDCO will utilize slightly more liberal underwriting guidelines than normal for making loans under this program (including the utilization of a minimum cash flow coverage ratio of 1.0/1.0, as well as partially relaxed collateral security requirements, where appropriate).
√ The Agricultural Cooperatives Equity Investment Fund provides a portion of the patient capital investment needed by cooperatives that do not have the necessary equity available to obtain the commercial financing that typically is required during the period that business operations are beginning or significantly expanding. The maximum amount of equity funding that MARBIDCO can provide to an individual cooperative is $100,000 in any single year. Equity contributions made to coops will be offered in a form resembling preferred stock, with a dividend to be paid annually beginning in the third year of business operation. After about the eighth year of a cooperative’s operation, the equity investment will be callable, at which time a lump sum principal repayment will be due, or alternatively, a loan note agreement must be entered into with MARBIDCO with a near market-rate interest charge. The following conditions must be met for a legally organized and recognized cooperative to be eligible for equity investment by MARBIDCO:
- MARBIDCO will consider a cooperative equity investment when the project fits within MARBIDCO’s statutorily established economic development profile. Any project funded must assist in some fashion Maryland’s farming, forestry, or seafood industries. Businesses that produce foodstuff or other goods that grow in the soil or in the water, and the packaging and/or value-added processing and marketing of such products, are generally eligible targets of MARBIDCO’s programs and services.
- Government financial participation is ordinarily required for any cooperative that receives an equity investment from MARBIDCO. A unit of federal, state or local government should ideally have at least an equal amount of grant resources invested in the cooperative project.
Specialty Lending Programs (with revolving funds provided by other agencies for targeted purposes)
√ The Rural Business Energy Efficiency Improvement Loan Fund (working in collaboration with MEA) offers low-interest (4%) "micro" loans for energy efficiency projects undertaken by food and fiber producers and processors implementing the recommendations of a third-party energy auditor. The minimum loan amount is $2,500 and the maximum loan amount is $30,000. A grant incentive of 10% of the loan amount is also now available to help borrowers reduce the expense. Loan advances may not exceed the cost of actually making the improvements minus any grant incentive funding received for a project. Loans made under this program are unsecured and only the personal guarantees of the borrowers and/or businesses would be required. Loans will be fully amortized with terms not exceeding the anticipated savings payback period with at least 1.0 - 1.0 ratio on the annual energy savings payback. A copy of an energy audit or an ag energy management plan report (or an energy savings confirmation letter) provided by a qualified third-party energy consultant is required to be submitted with the application, as well as, a letter of referral from a commercial lender.
√ The Maryland Shellfish (Oyster) Aquaculture Financing Fund (working in collaboration with DNR and using a combination of State capital and federal funds), helps watermen (and others) who wish to transition from wild oyster harvesting to start or expand underwater shellfish farming enterprises using leased growing areas in the Chesapeake or Coastal Bays plans (which as a by-product would also greatly contribute to estuarine water quality enhancement). Eligible projects include commercial aquaculture enterprises with feasible oyster or shellfish production and business plans. The loan proceeds can be used to purchase shell, seed, spat or equipment (depending on the source of funds). The borrower makes interest-only payments (at 3.0% APR) for the first three years while the oysters are growing to market size. After that, if borrowers have been consistent in making their quarterly payments, a portion of the principal balance will be forgiven and borrowers will fully repay the remaining amount of the loan over two additional years at a slightly higher interest rate. These loans are unsecured and only the personal guarantees of the borrowers and/or businesses would be required (although the loss of a DNR shellfish aquaculture lease is also at risk).
√ Remote Setting Shellfish Aquaculture Loan Fund (working in collaboration with DNR) provides affordable financing to commercial watermen who want to start or expand shellfish remote setting aquaculture operations. Remote Setting is a process for growers to produce seed oysters for aquaculture cost-effectively. The grower purchases larvae from a hatchery and places it in a tank containing cultch for the larvae to set on. Larvae are circulated through the tank to keep them in suspension while they cement themselves to the cultch and begin growing as spat. Spat on shell setting systems consist of a tank, pump, piping and valves, and a blower to provide low pressure air to circulate larvae during setting. A heater may be required during early or late season setting. Cultch-less setting systems are smaller and contain microchips, or small ground shell pieces, and are used to produce seed for contained aquaculture systems such as cages or floats. These are operated as downweller systems and require a pump, piping and valves, and blower. The University of Maryland Extension (UME) is also contributing to this effort by providing training and business planning assistance to current and prospective shellfish growers. Information on setting system design and operation, as well as training in their use and business planning assistance, is available from University of Maryland Extension. Eligible Expenses include items related to commercial remote setting aquaculture projects, with approved business plans, to raise oysters or clams in Maryland including the following equipment items: seed (larvae), shell (substrate), tanks, pumps, blower, values and tank heaters. Minimum/Maximum Loan Amounts: $5,000 to $30,000.
“Core” Rural Business Grant Programs
√ Local Government Ag/RBI Project Cost Share Program is designed to lend support to local and regional rural business development efforts. For MARBIDCO to participate in any economic development cost share project with a unit of local government the following criteria must, at a minimum, be met. MARBIDCO will consider a project cost-share request from a local or regional economic development office if the project fits within MARBIDCO’s statutorily established economic development profile. Any project or activity funded by MARBIDCO must assist in some fashion Maryland’s farming, forestry, or seafood industries. If a project directly benefits an individual farmer or rural business owner, then the farmer or business owner must be willing to make a financial contribution to help support the implementation of the project. Moreover, MARBIDCO’s participation in the cost share project cannot exceed that of the local government. The only exception to this requirement is that a county designated as “One Maryland” jurisdiction (i.e., a severely economically distressed county) may qualify for a match from MARBIDCO of up to 200% of the county’s contribution. Today, the maximum project cost share grant is $25,000.
Maryland Value Added Producer Grant – Capital Assets Option (MVAPG – CAO) is designed to encourage farms and other businesses wanting to expand or diversify their operations to purchase new equipment or construct facilities so that they can increase sales and job opportunities for rural and urban-edge residents in Maryland.MARBIDCO will offer grants of between $2,500 and $15,000 distributed on a competitive basis for capital asset projects. Eligible applicants must be a crop or livestock producer or processor, agricultural cooperative, seafood processor, or primary or secondary timber products processor, and have been in business for a minimum of two years. In addition, applicants must be making a product that is “value added”. A product that is value added has in incremental value realized by the producer or processor as a result of: 1) change in physical state; 2) differentiated production or marketing; 3) product segregation; and 4) economic benefit realized from the production of farm- or ranch-based, rural community-based biomass energy. MVAPG funds and matching funds must be used for projects that are defined as capital assets by MARBIDCO and that have a useful life of seven years or more. The match required from the rural business must be at least equal the amount requested from MARBIDCO.
Maryland Value Added Producer Grant (MVAPG – USDA Option) is designed to encourage participation in USDA’s highly competitive Value Added Producer Grant Program (which has both planning and working capital components). The USDA VAPG Program, which is offered annually, requires a financial matching commitment and each application for the USDA VAPG must include a “verification of matching funds”. The USDA VAPG Planning Grant offers a maximum award of $100,000, and the Working Capital Grant offers a maximum of $300,000. MARBIDCO’s grants could be applied for up to $15,000 and $30,000, respectively (the actual amount depends on the total pool of resources available for the MVAPG program.) To be eligible to apply to MARBIDCO for funding, a grant applicant must also be eligible under the USDA VAPG Program. Each applicant that has been selected to receive a MVAPG will receive a letter that contains how much funding will be to be available to the applicant in a MVAPG pool of funds (including a minimum and maximum amount of any potential grant award to be awarded if the applicant is successful in getting a grant under the USDA program). This commitment would amount up to 15% of the matching requirement required by the USDA. Funds will only be awarded to those who actually receive the USDA VAPG award.
√ Maryland Urban Agriculture Commercial Lending Incentive Grant (“MUACLIG”) Program, offered with the financial support of Farm Credit, is designed to meet the financing needs of beginning urban farmers by providing an incentive for them to seek commercial lender financing for the development of their agricultural enterprises. The maximum amount of the incentive grant is $7,500, calculated at no more than 20% of the project’s total cost and no more than 25% of the amount of the approved commercial loan for the project. (The minimum grant amount is $1,000, with an approved commercial loan of at least $4,000.) The participation of a commercial bank, farm credit association or FSA in providing project financing is required.
Rural Working Land Preservation Facilitation Programs
The Installment Purchase Agreements Program(s), working in conjunction with State and local farmland preservation agencies, enables the purchasing of easements on agricultural properties using tax-advantaged financial arrangements structured to benefit both landowners and the participating units of government. There are two types of IPAs – “self-funded” (which have been offered by MARBIDCO on behalf of the Maryland Agricultural Land Preservation Foundation), and “leveraged” (which MARBIDCO has developed to work in partnership with individual county governments).
MARBIDCO is also currently working with county governments to utilize Next Generation “Aggie Bonds” (taxable or tax exempt private activity bonds that help first-time farmers purchase farmland) to assist these counties with their critical farms and rural land preservation programs. Using Aggie Bonds MARBIDCO will facilitate a link with the county government, commercial mortgage lender, and a bond-buyer together with the farm seller and farm buyer to enable a farm property transfer to take place while preserving the land from future development. (Tax-exempt bonds are capped today at $501,000)
Coming when there is funding? – The Next Generation Farmland Acquisition Program will enable MARBIDCO, working directly with commercial lenders (as well as MALPF, Rural Legacy and county agricultural land conservation programs), to assist young and beginning farmers with the purchase of farmland, while at the same time extinguishing the development rights on the land being purchased. Legislation enacted during the 2008 Session of the Maryland General Assembly allocates certain funds collected each year to this program from the State’s share of the Agricultural Land Transfer Tax. With the current slump in the real estate market, funds for this program are not expected to be available anytime soon.
Note: √ denotes currently authorized and available MARBIDCO programs.
Read more about MARBIDCO Loan and Business Assistance Programs
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