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.
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.
√ Maryland Resource-Based Industry Financing Fund* (MR BIFF) offers low-interest (3.25% initially) loans to Ag/RBI-industry enterprises for the purchase of land and capital equipment for production and processing activities (including building construction). The maximum MARBIDCO loan amount is $250,000 for acquisition of equipment and fixed assets, $450,000 for real estate purchases, and $650,000 for large-scale food/fiber processing projects. MARBIDCO will provide between 20% to 40% of the debt financing needed for a project, and a commercial lender and/or a public entity must also have at least an equal or greater financial commitment in the transaction. MARBIDCO usually takes a subordinate lien on collateral with these gap financing loans.
√ Rural Business Equipment and Working Capital Loan Fund* offers moderate-cost loans (5.75%) to Ag/RBI-industry firms and producers (including farmers) for working capital and equipment purchases. The maximum loan amount is $75,000 (while the minimum amount is $10,000). Participation by a public sector lender is required (at a level matching or exceeding MARBIDCO's participation). A simple referral from a commercial bank is also required.
√ Maryland Vineyard/Hops/Tree Fruit Planting Loan Fund* offers low-interest (4-5%) loans to help meet the unique financing needs of Maryland's landowners wanting to plant fruit-bearing vines and trees. The maximum loan amount is $100,000, and an interest-only option is available for a period of two to three years. A referral from a commercial lender is required, as well as, a site evaluation approval letter from an appropriate university or other expert. The purchase of tractors, pick-up trucks, and wine- or beer-making equipment are not eligible for financing under this particular program.
√ Forestry Equipment and Working Capital Loan Fund* offers low-interest (5-10%, 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.
√ 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 production operations are beginning or significantly expanding. The maximum amount of "near equity" funding (equity converting to debt after several years) that MARBIDCO can provide to an individual agricultural cooperative is $100,000 in any single year.
Specialty Lending Programs
(Using unsecured revolving funds
provided by others for targeted purposes)
√ Maryland Shellfish Aquaculture Financing Fund* (working in collaboration with DNR and using a combination of State capital and federal NOAA 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. The loan proceeds can be used to purchase shell, seed, spat or equipment (depending on the source of funds). Bottom culture and water column (cages or floats) projects are eligible. The borrowers make interest-only payments (at 3.0% initially) for the first three years while the oysters are growing to market size. After that, if borrowers have been made their quarterly payments, 25% of the principal balance is forgiven (40% for firsttime borrowers) and borrowers fully repay the remaining balance over two to four additional years. The maximum single loan amount is $100,000 (and subsidized loan amounts cumulatively max out at $300,000).
√ Remote Setting Shellfish Aquaculture Loan Fund* Remote Setting Shellfish Aquaculture Loan Fund* (working in collaboration with DNR and using MPA funds) provides affordable financing to commercial watermen who want to start or expand shellfish remote setting (nursery) aquaculture operations. The nursery grower purchases larvae from a hatchery and places it in a tank containing cultch for the larvae to set on. 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. Seed (larvae), shell (substrate), and tank heaters (during cooler months) are also needed. The maximum loan amount is $30,000.
√ Rural Business Energy Efficiency Improvement Loan Fund* (working in collaboration with MEA and using RGGI funds) offers low-interest (4%) 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.
√ Southern Maryland Agricultural Revolving Loan Fund has been established by the Southern Maryland Agricultural Development Commission (SMADC) and MARBIDCO to help assist Southern Maryland agricultural producers with smaller agricultural projects that typically might not be financed by traditional commercial lenders. This program makes available subsidized low-cost loans to qualified applicants for the purchase of livestock (including shellfish aquaculture), the production of small fruits, and upgrades for the safe growing, harvesting, packing and holding of produce in conformance with Good Agricultural Practices (GAP) and the Food Safety Modernization Act (FSMA). Under this program, only the activities of agricultural businesses in these counties are eligible: Anne Arundel, Calvert, Charles, Prince George's, and St. Mary's Counties. The loan amounts may range between $10,000 to $20,000. SMDAC has incorporated into this program an incentive for borrowers in good standing by forgiving approximately 20-25% of the loan amount due at the end of the loan term (by foregoing the final one-quarter of amortizing loan payments).
* In Southern Maryland only, SMADC is offering up to 5% in equity incentive grants under these loan programs.
“Core” Agri-Business Grant Incentive Programs
√ Local Government Ag/RBI Project Cost Share Program is designed to lend support to local and regional rural business development efforts. 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 mission area. (Basically, any project or activity funded by MARBIDCO must assist in some fashion Maryland's farming, forestry, or seafood industries.) Moreover, MARBIDCO's participation in the cost share project cannot exceed that of the local government (unless it is a "One Maryland" jurisdiction, where the funding could be up to double the amount). The maximum project cost share grant is $10,000 (or up to $25,000 under special circumstances), while Food Safety Modernization Act (FSMA) matching grants are capped at $5,000 and deer fences at $3,000.
√ Maryland Urban Agriculture Commercial Lending Incentive Grant (MUACLIG) Program, offered with some matching support of Farm Credit, is designed to meet the financing needs of urban farmers by providing an incentive for them to seek commercial lender financing for the development or expansion of their agricultural enterprises. The participation of a commercial bank, Farm Credit Association or FSA in providing project financing is required. 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 a commercial loan of $4,000, for a $5,000 project.)
√ Maryland Value Added Producer Grant – Capital Assets Option (MVAPG–CAO) is designed to encourage farms and other rural businesses wanting to expand or diversify their operations to purchase equipment or construct facilities. Once per year MARBIDCO offers grants of between $2,500 and $10,000 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 ranchbased, rural community-based biomass energy. MVAPG funds and matching funds must be used for capital assets 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 Matching Grant (MVAMPG – 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 non-federal financial matching commitment and each application for the VAPG must include a "verification of matching funds". The USDA VAPG Planning Grant offers a maximum award of $75,000, and the Working Capital Grant offers a maximum of $250,000. Grants from MARBIDCO can be applied for up to $11,250 and $25,000, respectively (up to a maximum of 15% of the USDA matching requirement). To be eligible to apply to MARBIDCO for funding, an applicant must also be eligible under the USDA VAPG Program, and funds will only be awarded to those who actually receive the USDA VAPG award. Each applicant that has been approved to receive a MVAPG will receive a letter for submission to USDA that contains how much funding will be to be available to the applicant. (Notably, capital equipment purchases are not eligible for USDA VAPG funding.)
Rural Working Land Preservation Facilitation Programs
(Which use externally-provided funding)
√ Installment Purchase Agreements (IPAs), working in conjunction with State or county 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: 1) "self-funded" (which have been offered in the past by MARBIDCO on behalf of the MD Agricultural Land Preservation Foundation), and 2) "leveraged" (which can be offered in partnership with individual county governments). Unfortunately, no IPA transactions have been facilitated since the onset of the Great Recession.
√ Next Generation Farmland Acquisition Program enables MARBIDCO, working with commercial lenders, and farmland conservation programs to assist beginning farmers with down-payment funding for the purchase of farmland, while at the same time effectively extinguishing the development rights on the farmland being purchased. Contact MARBIDCO or your county agricultural land preservation program office for more information.