Food Logistics Loan Program Summary
The U.S. federal government Food Logistics Loan Program is a temporary program to bring loan capital to companies that process, manufacture, transport, or add other value to the nation’s food supply. The program is available to for-profit businesses, co-ops, tribal organizations, and non-profits that add value to the food supply in the United States. It doesn’t matter where in the U.S. you are based and is available to both rural and urban organizations.
The Food logistics loan program is designed to provide inexpensive capital via long-term loans of up to $45 million to businesses that add value to any food products between the farmer, fisherman, or rancher and the commercial end user.
Examples of qualifying organizations include:
- Meat processing plants that take animals from farmers, and ranchers and process them for further use or sale.
- Feedlots and auction barns that finish preparing livestock for sale.
- Businesses that take raw ingredients and mix them to make processed food ingredients that can be cooked, and used in other food products at either the commercial or consumer level.
- Fish or seafood processing plants that take a caught fish and clean, filet, and flash freeze it for further processing or end use.
- A milk or milk byproducts plant that takes raw milk, pasteurizes, and separates the components for use in a variety of milk products.
- Cooperatives and aggregators that store raw food products such as grain from multiple farmers for sale or transport to other food processors. Most farmer’s cooperatives qualify.
- A wholesale distributor that buys or takes consignment food and food products and then sell them to other commercial customers for retail sale or other uses. A fruit and vegetable produce distributor is a good example of this type of wholesaler.
- Companies that transport food and food products from the farmer to the processor or end commercial user or retail store. Refrigerated trucking companies are good examples.
There are hundreds of other types of organizations that qualify for the food logistics loan program.
Examples of organizations that do not qualify:
- The farmer who grows food and the fisherman that catches seafood. There are other long-standing programs that assist these entrepreneurs.
- Retailers who sell the food product directly to consumers.
- Businesses or organizations that manufacture, wholesale, or add value to alcoholic beverages including wine, distilled spirits, and beer.
- Businesses that manufacture or sell packaging for partially or fully completed food products.
Food Logistics Food Program Use of Loan Proceeds
- Expand physical facility to increase food processing abilities.
- Acquire other businesses that compliment your existing company.
- Increase inventory to insure an adequate supply of raw materials for production and finished goods for sale.
- Provide permanent working capital to begin selling to large national retailers. Financing accounts receivable and paying retailer slotting fees qualify.
- Capital to provide greater safety cushion, post-pandemic, or because inflationary pressure is increasing in the food marketplace.
- Buy a piece or line of equipment that will speed up or make a process within a food facility more efficient.
- Buy refrigerated trailers or trucks to transport partially or finished food to the next step in the supply chain.
Next Steps
As one of the nation’s leading finance companies for food and beverage products, Business Finance Solutions (BFS) is highly involved in the Food Logistics Finance Program. We have originated hundreds of loans for the food and frozen fish industry.
For more information, call Sam Thacker @ 512.990.8756, email: sam@bfs-usa.com.