234.91 Farm assets reinvestment management loan guarantee program.
(1) Definitions. In this section:
(a) “Agricultural assets" means machinery, equipment, facilities, land or livestock used in agriculture or aquaculture.
(b) “Farm credit service" includes a production credit association, federal land credit association and agricultural credit association.
(c) “Farmer" means a person engaged in, or who intends to engage in, farming, as defined in s. 102.04 (3).
(d) “Farm premises" has the meaning given in s. 102.04 (3).
(e) “Participating lender" means a bank, farm credit service, credit union, savings bank, savings and loan association or other person who makes loans for the acquisition or improvement of agricultural assets and who has entered into an agreement with the authority under s. 234.93 (2) (a). The term does not include a seller under a land contract.
(2) Eligible loans. A loan made by a participating lender is eligible for guarantee of collection from the Wisconsin development reserve fund under s. 234.93 if all of the following apply:
(a) The borrower is a farmer who is eligible for a guarantee under sub. (3).
(b) The loan is made to finance the acquisition of agricultural assets or the cost of improvements to facilities or land. The agricultural assets must be acquired, and the improvements must be made, for agricultural or aquacultural purposes.
(c) The total guarantee amount of all loans made to the borrower that are guaranteed under this section will not exceed $200,000, or $100,000 if any of the loans is affected by any other state or federal credit assistance program.
(d) The rate of interest and the loan terms, including any associated fees or charges, are approved by the authority.
(e) The participating lender obtains a security interest in assets of the borrower sufficient to secure repayment of the loan.
(g) Loan proceeds are not used to refinance existing debt, for entertainment expenses, or for expenses related to a community-based residential facility, except that loan proceeds may be used to refinance existing debt if the borrower also expands an existing business.
(3) Eligible farmers. A farmer is eligible for a guarantee of a loan under this section if all of the following apply at the time the loan is made:
(a) The farmer is any of the following:
1. A person who currently operates farm premises.
2. A person who intends to operate farm premises and who has not less than 3 years of farming experience including managing the day to day operations of a farm.
3. A person who intends to operate farm premises and maintain the family farmstead on the farm premises and who has previous experience with the operation of the specific farm premises.
(b) The amount of the farmer's debts related to the agricultural assets, including the loan, is at least 40 percent and does not exceed 85 percent of the farmer's assets, including the value of the agricultural assets to be acquired, or the improvements to be made, with the proceeds of the loan. The authority shall consider only the farmer's debts and assets that are related to the agricultural assets that are the subject of the loan.
(c) The participating lender considers the farmer's assets, cash flow and managerial ability sufficient to preclude voluntary or involuntary liquidation during the term of the loan.
(4) Origination fees. The authority may charge a guarantee origination fee on every loan guaranteed under this section. The amount of the fee may not exceed 1.5 percent of a loan's guaranteed principal. The participating lender shall collect the fee and remit it to the authority. The authority shall deposit all fees received under this subsection in the Wisconsin development reserve fund.
(5) Guarantee of collection.
(a) The authority may guarantee collection of a percentage of the principal of a loan eligible for a guarantee under sub. (2). The total guarantee amount of all loans to the farmer that are guaranteed under this section may not exceed the borrower's net worth or 25 percent of the total loan amount, whichever is less, calculated at the time the loan is made.
(b) The term of the authority's loan guarantee under this section is not longer than 10 years. This paragraph does not apply to a guarantee of a loan that is part of a loan workout agreement.
History: 1995 a. 150; 1999 a. 9; 2001 a. 16; 2005 a. 75, 480; 2015 a. 316; 2017 a. 21.