Farm Operating Loan Program
This loan funds operating expenses.
This loan assists farmers and ranchers with operating loans.
The borrower is a farmer or rancher who is a North Dakota resident and owns/operates an existing farm or ranch. The borrower’s debt-to-asset ratio must exceed 50% or the borrower must have a net worth of less than $750,000.
Proceeds may be used for the current operating year of an existing farm or ranch. The loan may not be used for payment of delinquent debt, interest payment, principal payment or capital expenditure.
BND’s participated share is limited to the lesser of $500,000 or 65 percent of the total loan amount.
Interest rate: The interest rate on BND’s participation percentage shall be variable at 1.00% below BND’s base rate. The interest rate charged by the local lender on its percentage may float with BND’s base rate, but may not exceed BND’s base rate by more than 2.00%.
Fees: No origination fee is charged by BND.
BND uses its normal credit standards in reviewing the loan.
Collateral may be crops, livestock or equipment liens. A pledge of FSA payments and assignment of crop insurance is required when available. Depending upon the circumstances of a loan, additional security may be requested.
BND’s participated loan amount may not exceed 65 percent of the total loan amount. Borrower must work with a local lender to submit the loan application. Lead lender is responsible for servicing the loan.
The maturity date of this loan may not exceed one year. No renewal or extension may be approved beyond the initial maturity date of the loan except in the case of a livestock producer retaining ownership. All advances are made and payments received on a pro-rated basis.