Interest Rate Reduction Program

Interest Rate Reduction Program

Jurisdiction:	Texas
Incentive Type:	Grant Program
Industries:	Agricultural, Infrastructure
Eligible Sector:	Business
Category:	Financial Incentive
Time Period:	FY 2015
Governing Body:	Texas department of agriculture
What’s it worth?:	$500,000 maximum loan amount

The Interest Rate Reduction Program is designed to reduce loan interest rates for new or expanding agricultural business owners in Texas. The program provides low interest commercial lending for agricultural purposes as an effort to expand agricultural enterprises. Funds are distributed through participating lenders and must meet lenders underwriting requirements. Awarded funds cannot exceed $500,000 and the interest rate may vary for each biennium.

Any entity proposing to use the loan funds to expand and create agricultural business in the state of Texas are eligible to apply for these funds. Funds may be used for any agriculture-related expenses such as:

• Purchasing or leasing land
• Asset acquisition or improvement
• Any enterprise based on agriculture

Terms are agreed upon between the lender and borrower depending on repayment, maturity, and collateral for the loan. This is not a loan protection program and the Texas Agricultural Finance Authority is not liable to lending institutions for default by the borrower.

The borrower and lender must contribute to the application. The borrower must provide the following information:

• Current employment
• Physical location of the project
• Project explanation
• Application
• Estimated annual gross sales or return on investment
• Amount requested
• Project Budget

The lender must provide:

• Contact information
• Interest rate reduction amount
• Estimated IRR
• Margin of Interest to be charged to the borrower
• Market Rate of the loan
• Date of loan maturity
• Estimated payoff date
• Federal tax identification number and routing number
• Lender’s wiring instructions

Both parties must sign the application before submitting for consideration.