Agricultural development loan guarantee program
Wis. Stat. § 234.907
in effect(1) Definitions. In this section:
(d) “Guaranteed loan” means a loan on which the authority guarantees collection under sub. (3) or (4).
(e) “Participating lender” means a bank, credit union, savings bank, savings and loan association or other person, who makes loans for working capital or to finance physical plant needs, equipment or machinery and who has entered into an agreement with the authority under s. 234.93 (2) (a).
(f) “Percentage of guarantee” means the percentage established by the authority under sub. (3) or (4).
(g) “Raw agricultural commodity” means any agricultural, aquacultural, horticultural, viticultural, vegetable, poultry, and livestock products produced in this state, including milk and milk products, bees and honey products, timber and wood products, or any class, variety or utilization of the products, in their natural state.
(h) “Security interest” means an interest in property or other assets which secures payment or other performance of a guaranteed loan.
(2) Eligible loans. A loan made by a participating lender is eligible for guarantee of collection from the Wisconsin development reserve fund under s. 234.93 if all of the following apply:
(a) The loan is made for working capital or to finance any of the following items, if the working capital or item is necessary to, or used to, process or market a product from a raw agricultural commodity produced in this state or to commercially harvest whitefish from Lake Superior:
1. Physical plant.
2. Machinery or equipment.
3. Marketing expenses.
(b) The rate of interest on the loan, including any origination fees or other charges, is fixed at a rate determined by the participating lender and approved by the authority.
(c) Subject to par. (cm), the total guarantee amount of all loans to the borrower that are guaranteed under this section will not exceed $750,000.
(cm) The total guarantee amount of all loans to the borrower that are guaranteed under this section and that are made for working capital or an item necessary to, or used to, commercially harvest whitefish from Lake Superior will not exceed $100,000. This paragraph does not apply to a loan guaranteed under sub. (4).
(d) The borrower’s principal place of operations for processing or marketing a product from a raw agricultural commodity is located in a town, village or city in this state with a population of less than 50,000. This paragraph does not apply to a borrower that harvests whitefish from Lake Superior.
(e) The participating lender obtains a security interest in physical plant, equipment, machinery or other assets.
(f) The term of the authority’s guarantee under this section is not longer than 10 years for land and buildings, 5 years for inventory, equipment, and machinery, and 2 years for working capital and marketing expenses. This paragraph does not apply to a loan that is part of a loan workout agreement.
(g) The proceeds of the loan are not applied to the outstanding balance of any other loan.
(h) The loan results in new or more viable methods for the processing or marketing of a product from a raw agricultural commodity or enables the borrower to comply with the rules promulgated by the department of natural resources for the commercial fishing of whitefish in Lake Superior.
(i) The borrower does not meet the participating lender’s minimum standards of creditworthiness to receive a loan for the purposes described in par. (a) in the normal course of the participating lender’s business.
(j) The participating lender considers the borrower’s assets, cash flow and managerial ability sufficient to preclude voluntary or involuntary liquidation for the loan term granted by the participating lender.
(k) The participating lender agrees to the percentage of guarantee established for the loan by the authority.
(2m) Origination fees. The authority may charge a guarantee origination fee on every loan guaranteed under this section. The amount of the fee may not exceed 1.5 percent of a loan’s guaranteed principal. The participating lender shall collect the fee and remit it to the authority. The authority shall deposit all fees received under this subsection in the Wisconsin development reserve fund.
(3) Guarantee of collection. The authority may guarantee collection of up to 90 percent of the disbursed principal of any loan eligible for a guarantee under sub. (2). The authority shall establish the percentage of the unpaid principal of an eligible loan that will be guaranteed, using the procedures described in the guarantee agreement under s. 234.93 (2) (a). The authority may establish a single percentage for all guaranteed loans or establish different percentages for eligible loans on an individual basis.
(4) Alternative guarantee of collection pilot program.
(a) Notwithstanding sub. (3), the authority shall implement a pilot program under which it may guarantee collection of 25 percent of the disbursed principal of any loan eligible for a guarantee under sub. (2) or $750,000, whichever is less.
(b) In the event of default, the amount guaranteed under par. (a) shall be payable in full to the authorized lender regardless of the amount due after all available collateral securing the loan has been liquidated and applied to the loan, except that if that amount due is less than the amount guaranteed under par. (a), the amount due shall be payable to the authorized lender.
(c) The authority shall allocate at least $3,000,000 for loan guarantees under par. (a).
(d) The authority may not guarantee a loan under par. (a) after June 30, 2024.
Source: WI Statutes (Official Site)URL: https://docs.legis.wisconsin.gov/document/statutes/234.907Fetched: 10/7/2026