Maryland Resource-Based Industry Financing Fund (MRBIFF)
NOTICE TO LENDERS AND PROSPECTIVE APPLICANTS:
The MRBIFF Loan Program is transitioning from a direct lending program into a Participation Loan program. The Participation Loan option is currently offered through Horizon Farm Credit and Colonial Farm Credit. (If other lenders are interested in adopting this lending approach, please contact MARBIDCO.) MARBIDCO currently accepts applications under both the direct lending program and the participation loan program. Call 410-267-6807 or email bcadden@marbidco.org for more information.
Overview
Both MRBIFF programs offer low-interest loans to agricultural/RBI-industry enterprises to purchase land and capital equipment for production and processing activities.
Commercial Lender Is Required
Direct Loan Maximum Loan Amounts
Real Estate and renewable energy projects- $600,000
Equipment/fixed assets- $300,000
Large-scale food/fiber processing projects- $ 1,000,000 (but not more than 25% of the project cost)
Direct Loan Structure: MARBIDCO can provide supplemental loan proceeds within a range of 20% to 40% of the total commercial financing needed, working with a commercial bank and/or public sector lender. (Illustration: If a bank is willing to loan $60,000 for a $100,000 business activity contingent on MARBIDCO’s participation, MARBIDCO may loan up to an additional $40,000 for such a project.) A 50/50 participation is possible under extraordinary circumstances.
Participation Loan Maximum Loan Amounts
Real Estate and renewable energy projects - $700,000
Equipment/fixed assets- $350,000
Large-scale food/fiber processing projects- $ 1,000,000 (but not more than 25% of the project cost)
Participation Loan Structure: MARBIDCO's share is between 30% and 49%, and the Lender's share is between 70% and 51%. Concerning collateral security in the Participating Loan, MARBIDCO will generally take a subordinate lien position to that of the bank.
MARBIDCO Interest Rate:
Direct loan - 4.75% for the first 3 years, 5.25% for the next 3 years, and 5.75% for the remaining term of the loan. MARBIDCO will charge a loan origination fee of 1% of the direct loan amount.
Participation loan - 4.25%, and the primary lender may require a loan servicing fee of up to 0.75% (maximum 5.00% for the full term of the loan)
Loan terms:
The MRBIFF direct loan program, equipment is 5 to 7 years. Land is 10 to 30 years (typically with a 10-year balloon).
The MRBIFF participation loan program is aligned with the partnering lender’s terms, including a mandatory MARBIDCO 15-year balloon payment.
Application Submission Process
All MRBIFF loan applications will be developed and submitted to MARBIDCO by a commercial bank or Farm Credit Association loan officer (possibly in consultation with other rural business advisors) and/or a Farm Service Agency representative.
MARBIDCO will make and service its loans in the direct loan program.
The lender will make, service, and close all loans with their documentation in the Participation Loan.
Equity Requirement - Direct Loan
Typically, 10% of a project’s total cost (Can be less for young/beginning farmers; poultry projects may not exceed a maximum combined loan-to-value of 92%.
Email completed applications to Brian Cadden at bcadden@marbidco.org or mail to Loan Programs, c/o Brian Cadden, 1410 Forest Drive, Suite 21, Annapolis, MD 21403
Equity Incentive Program
This partnership program below works in tandem with MARBIDCO and is designed to incentivize loan requests from farmers in Cecil, Kent, and Queen Anne's on the Eastern Shore.
Each MARBIDCO loan program has its own eligibility criteria and an application/approval process.
The Upper Shore Regional Council Farm Loan Equity Incentive Matching Fund will contribute up to a maximum of $15,000 towards an MRBIFF Program loan, and in all other loan programs, the equity incentive match would be capped at $5,000 (per applicant). A match of 5% borrower equity is generally required to obtain the incentive funds. Click below:
