MARBIDCO PANDEMIC ADJUSTMENT EQUIPMENT GRANT FUND & PANDEMIC ADJUSTMENT LOAN FUND
Pandemic Adjustment Loan Fund (PALF) Program
The Pandemic Adjustment Loan Fund has been established by MARBIDCO to help Maryland’s food and fiber producers and harvesters obtain funds quickly to make adjustment in their business operations because of the challenges created by the COVID-19 pandemic. This program makes available low-cost loans to qualified applicants for working capital and equipment purchases under very favorable terms to help keep people working. (Note: the maximum loan amount for tangible equipment is $10,000, and maximum amount for working capital is $3,000. And the total maximum loan amount for all purposes is: $10,000.) Borrowers who make all their payments will receive a 10% grant back at the end.
Working capital includes, but is not limited to, the following: planting materials such as seeds, fertilizers and plastic covers, hand tools, advertising and marketing expenses, and hired labor. Tangible equipment includes equipment with 7 years or more usual lifespan such as: motorized equipment, vehicles, commercial kitchen facilities, engine replacement, refrigeration units, etc.
Eligible applicants must currently be operating their qualifying business enterprises in a substantial manner (e.g., as farmers, loggers and seafood harvesters, or as primary food/fiber processors). Spin-off activities of the main business enterprise are eligible and encouraged, but purely start-up businesses are generally not eligible. As such, all applicants must demonstrate that they are currently, or recently have been, producing, harvesting or processing food or fiber products. Applications can be submitted until June 15th (or until the available funding runs out). Note: MARBIDCO borrowers who are not currently in good standing are not eligible for this program.
Loan Terms and Conditions
- Minimum/Maximum Loan Amount: $2,500 / $10,000 (Note: The maximum amount for working capital is $3,000.)
- Borrower Equity Requirement: None. However, the applicant business must demonstrate that it currently is in operation as an eligible enterprise (as described above).
- Minimum Credit Score: 620 (of the principal business owners).
- Interest Rate: 3.75%.
- Loan Origination Fee: None.
- Loan Terms: Interest-only payments starting on Aug. 1st and running until Dec. 31, 2020. Loan payments will be amortized over a 12- to 36-month period thereafter. Borrowers who make all their payments will receive a 10% grant (of the amount borrowed).
- Commercial Lender Involvement: A copy of a recent relevant bank checking statement. Collateral Security Required: None.
- Personal Guarantee: Required. All loans made to a business entity must be personally guaranteed by the owners of the business.
- Application Submission Process: All applications must be originated by the applicant. Applications are processed as they are received.
- Send Completed Applications to: EMAIL to: Info@marbidco.org or mail to MARBIDCO Pandemic Adjustment Loan Fund, 1410 Forest Drive, Suite 21, Annapolis, MD 21403
Pandemic Adjustment Equipment Grant Fund (PAEGF) Program
The Pandemic Adjustment Equipment Grant Fund (PAEGF) has been established by MARBIDCO using federal Coronavirus Relief Funds provided by the State of Maryland (Maryland Department of Health) to help Maryland’s food and fiber producers, harvesters and processors obtain funds quickly to make adjustments in their business operations in light of the challenges created by the COVID-19 pandemic. Applicants are eligible for grants for qualifying equipment and capital asset purchases for on-farm production, processing and storage (including refrigeration), wood processing, and seafood processing. Seafood and timber harvesters may also qualify if the equipment purchases are needed to make business adjustments to help with the pandemic’s impact. Eligible applicants must currently be operating their qualifying for-profit business enterprises in a substantial manner. Spin-off activities of the main business enterprise are potentially eligible, but purely start-up businesses are not eligible. As such, all applicants must demonstrate that they are currently, or recently have been, producing, harvesting or processing food, feed or fiber products.
Nonprofit organizations are not eligible applicants for this program. No equipment may be purchased (or ordered) after July 30, 2020, but equipment that has been purchased since March 15, 2020 may be eligible for cost reimbursement.
Standard motorized farm implements, cars, trucks, and boat purchases ARE NOT eligible equipment items under this program, but refrigeration units to be installed in trucks and vans are eligible. In addition, any equipment or capital asset purchase made before March 15, 2020 is ineligible. Moreover, priority in the review of applications will include an assessment of immediate need, the amount of money being requested, as well as the following:
Higher Funding Priority: Grants to be used for food, fiber, and nursery/greenhouse production, processing, and distribution.
Lower Funding Priority: Grants to be used for other purposes not described above.
Applicants may apply for grants of up to $50,000 (or up to $75,000 for wood and seafood processors or agricultural cooperatives). MARBIDCO will not pay more than 80% of the eligible cost and the applicant is responsible for the remaining portion of the purchase cost. Applicants may use loan proceeds from the Pandemic Adjustment Loan Fund (or other MARBIDCO loan programs) to help satisfy the applicant’s matching funds requirement.
The application deadline is June 10, 2020 (and electronic submissions are encouraged). Applications received in the mail postmarked no later than June 6, 2020 will also be accepted.
Eligible applicants must be a crop, forage or livestock farmer or processor, nursery or greenhouse producer, seafood or timber harvester, agricultural cooperative, seafood processor, or primary or secondary timber products processor. Grant funds and matching funds must be used for equipment projects and capital asset purchases that have a useful life of seven years or more. Applicants must demonstrate that they have been negatively impacted by COVID-19 and that the grant will be used to adjust their operations in order to serve new markets or make their operations more economically sustainable going forward in the short-term. Applicants that can demonstrate an immediate need for the equipment use will be given higher priority.
Eligible expenses are equipment and capital assets which will help farmers and producers, seafood and timber harvesters, forest product operations, and food and seafood processors to make adjustments caused by the pandemic and diversify their business operations. Examples include, but are not limited to, the following:
- Refrigeration and related food storage equipment and facilities
- Livestock or seafood processing equipment and facilities
- Fruit, vegetable or timber processing equipment and facilities
- Composting equipment and facilities
- Creamery production equipment
- Manure digesters
- Optimization systems for maximizing fiber yield recovery
- Dry kilns, shavings mills, sawdust dryers and in-woods chippers
- Production buildings and major fixtures
Ineligible expenses are those not specifically stated under eligible expenses, such as, but not limited to, the following:
- Any expense incurred prior to March 15, 2020
- Tractors, combines, sprayers or similar common farm implements and most attachments thereto
- Any self-propelled vehicles (except forklifts and certain vehicles used in timber processing)
- Property acquisition costs
- Mortgage refinancing
- Costs of borrowing (e.g., points and other fees)
- Site plan and construction permits
- Wages paid to applicant or employees, or applicant or employee training costs
- Solar or wind energy projects
- Furnishings, fixtures or equipment considered personal (non-business) property,
- Hand tools and generally equipment items with a cost of less than $100
- Machine storage, ancillary workshops, housing, classrooms, etc.
- Any portion of expense for which the applicant pays a contractor in merchandise or service in lieu of cash
- Attorney’s fees and consultants’ fees
- Fees and/or costs not consistent with eligible costs
- Computer equipment
Pandemic Adjustment Grant Conditions
Maximum Amount of Grant: $50,000 (up to $75,000 for wood or seafood processors or agricultural cooperatives)
Minimum Amount of Grant: $1,000
Match Required: Applicants will be required to pay for at least 20% of the eligible cost. Applicants may use loan proceeds from the Pandemic Adjustment Loan Fund (or other MARBIDCO loan programs) to help satisfy this matching requirement.
Application Deadline: Received electronically by June 10, 2020 or postmarked no later than June 6, 2020.
Disbursement of Funds: Applications for $20,000 will typically receive higher review priority while applications for more than $20,000 may be reviewed after June 10th. All grants will be awarded on a discretionary basis. It is anticipated that successful applicants will be notified by June 26th of their award amounts. No eligible equipment may be purchased (or ordered) after July 30th.
- Submit a completed and signed application form and all required attachments.
- Attachments include:
- Written Business Plan (see Section 6 of the application for what needs to be included in the business plan).
- Project budget – list of equipment or facilities to be acquired with cost estimates.
- Applicant and business operation tax return(s) for the preceding year (latest available, 2018 or 2019).
- Completed Balance Sheet (see website for attachment 1).
- Completed Income Statement for the past year (see website for attachment 2).
- Evidence of matching funds (e.g., copy of bank statement or bank loan commitment letter).
Send Completed Applications to: Electronically to firstname.lastname@example.org, or by mail to: MARBIDCO Pandemic Adjustment Equipment Grant Program,1410 Forest Drive, Suite 21, Annapolis, MD 21403
March 15, 2020: No equipment purchases before this date can qualify for either PALF or PAEGF.
June 6, 2020: Postmark deadline for PAEGF (Grant) application submissions.
June 10, 2020: Deadline for PAEGF electronic application submissions.
June 15, 2020: Deadline for PALF (Loan) Applications to be submitted.
July 30, 2020: No equipment may be purchased (or ordered) after this date for PAEGF.