Guaranteed Loan Fund discussed to help producers after blizzard - KOTA Territory News

Guaranteed Loan Fund discussed to help producers after blizzard

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As ranchers continue to recover from their losses and wait for the farm bill to pass, there may be other financial options available from the state. Meade County commissioners met with producers and financial lending institutions Wednesday to discuss a Guaranteed Loan Fund that could help  producers who suffered losses after October's blizzard.  

Cattle producer Rick Johnston lost seventy five percent of his cattle during the storm and his daughter lost most of hers, too. "She owns cows, she did own cows, she's going to school and she has these cows to help herself through school and she has two left. So we gotta figure out something" Johnston said. 

"In essence what would happen is the lender, whoever that may be Farm Services of America of any other lender, who extend the credit to a customer and the state would come back with guaranteed of the either the payment of entire principle amount" says Bob Schmidt of Farm Credit Services of America. 

Schmidt says lending companies partnering with the state could be a good thing for producers. "They have less risk, there's less risk because the state is willing to guarantee, let's say a portion of the debt" says Schmidt. 

Representatives from Farm Credit Services of America say they are willing to work with the state. Schmidt says "we would be open to those options to were however the parameters of the program be put in place we could assist producers with this kind of program, whatever it'll be."

Rick Johnston is also open to those options. He says " there's some hope out there, if they can get something done with this deal they were talking about today, yeah that'll be great."

The Guaranteed Loan Fund is still in the discussion phase. 

The South Dakota Department of Agriculture has a loan program in place right now called the Bridge Loan program. This program can be used when there isn't  disaster. The Bridge Loan program is available to Farm Service Agency (FSA) approved borrowers when funding is not available at the time the borrowers get ready to buy land. The loan is structured for monthly interest only payments until the funding is available at FSA. If, for any reason, FSA does not fund the loan, SDDA will term the loan out over 10 years. The current interest rate for SDDA's loan is four percent and borrowers are required to pay all closing fees.

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