AgBMP Loans

Agricultural Best Management Practice Loans:

The AgBMP loan program is a water quality program that provides low interest loans to Minnesota farmers, rural landowners, and agricultural supply businesses. The purpose is to encourage agricultural Best Management Practices that prevent or reduce runoff from feedlots, farm fields and other pollution problems identified by the county in local water plans.

Loans can be for:

The AgBMP loan program is able to fund any activity or practice that helps to improve water quality or that helps maintain high water quality. The following shows a few examples but is not a complete list of all possibilities:

  • Feedlot improvements, manure storage basins and spreading equipment
  • Conservation tillage equipment
  • Terraces, waterways, sediment basins
  • Shore and river stabilization
  • Septic systems
  • Other projects that improve water quality
  • For a complete list, see AgBMP Practice Examples

Cost Savings:

The AgBMP Loan Program provides financing at below-market interest rates. These 3% low-interest loans save you money, making it more economical to implement practices that improve and protect water quality.

Money Available:

The money available is on a revolving fund basis. Blue Earth County works off of a $900,000 budget of revolving funds. This means that as borrowers pay off their loans, that money comes back to us free and clear to loan out again on new projects/equipment. Repayments can be received at any time throughout the year but the bulk of them are received twice a year – April and October. The exact amount we have available to loan out will vary so applications may be placed on a waiting list until they can be funded.

Ineligible Projects:

  • Projects already completed
  • New construction projects that do not improve water quality
  • Improving feedlots with more than 1,000 animal units
  • Re-financing of projects that are already completed with existing lender conventional financing.
  • Constructing a new facility

Application process:

  1. The borrower proposes a project to the county for approval.
  2. If the borrower is eligible and the project addresses local water quality problems, the county approves the project and refers it to a participating local lender.
  3. The lender evaluates the financial details of the project and decides whether to offer a loan.
  4. The lender and the borrower negotiate the terms of the loan.
  5. The borrower completes the project.
  6. The borrower provides bills and receipts for the cost of the project to the lender.
  7. The lender requests money from the AgBMP Loan Program.
  8. The AgBMP Loan Program sends the requested money to the lender.
  9. The lender issues the loan to the borrower.
  10. The borrower pays back the lender.
  11. The lender pays back the AgBMP Loan program.

Who may apply for loans:

  • Farmers
  • Rural landowners
  • Farm supply businesses

Loans are used to restore or protect water quality, whether on a farm, a rural home site, in an un-sewered community, or at a lakeside cabin.

Loan Terms:

  • Loan amounts are limited to $200,000 to any one individual or project.
  • Maximum loan length is 10 years
  • Maximum interest rate is 3%
  • Lender may charge customary fees
  • Lender may require collateral
  • Borrower must meet lending criteria
  • Additional local limitations may apply

For more information, please contact Jillian Kuduk from our office.