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New Wisconsin law creates ag loan guarantee program

Another proposal from Wisconsin’s recent Dairy Task Force has been signed into law.  Senate Bill 219, now Act 62 requires the Wisconsin Housing and Economic Development Authority (WHEDA) to use three million in existing funds to establish a pilot loan guarantee program within the agricultural development’s loan guarantee program that can be used for brick-and-mortar investments, equipment and machinery, marketing, and working capital.

It’s a pilot supported by the Wisconsin Cheese Makers Association, which says it will guarantee up to 25 percent of a loan, or $750,000, whichever is less and, the rigorously vetted borrower is required to pay back the entire loan, with a state commitment only happening in the event of a default. Wisconsin Cheese Makers Executive Director John Umhoefer says by extending access to capital, it enables rural business owners, including cheesemakers and other dairy processors, to invest in their companies, employees, and communities.

Act 62 also makes changes to the agricultural development loan guarantee program by prohibiting the term of a loan guarantee from exceeding ten years for land and buildings, 5 years for inventory, equipment and machinery, and 2 years for permanent working capital and marketing expenses, and prohibiting the closing fee for a loan guarantee from exceeding 1.5 percent.

The legislation was authored by Senator Howard Marklein (R-Spring Green), Senator Janet Bewley (D-Mason), Representative Gary Tauchen (R-Bonduel), and Representative Don Vruwink (D-Milton), Senate Bill 219 was unanimously approved by both houses of the Wisconsin State Legislature.

Earlier this year, the state approved nearly eight million dollars in funding for a Dairy Innovation Hub, which will partner farmers, processors, and three University of Wisconsin campuses to expand dairy product development.