Prequalification

The Carrot Project Agriculture Fund

2014

Thank you for your interest in The Carrot Project Agriculture Loan Program, a project of the Vermont Community Loan Fund (VCLF) and The Carrot Project. The objective of the program is to address the difficulty that some Vermont farms and food system enterprises have in obtaining credit for projects that improve their operations and increase their income.


APPLICATION PROCESS

(1) A prequalification questionnaire determines your eligibility. Please allow up to four (4) business days to receive a response to your prequalification questionnaire.

(2)The full application includes business information including detailed financials. Please request the application from Benneth Phelps, , once your prequalification is accepted. Submitting an application before the deadline is highly suggested and allows time for it to be reviewed for completeness. Each application must include a $50.00 application fee payable to The Carrot Project which will be returned if the application is withdrawn prior to the site visit (Step 3).

(3)A site visit for all conditionally approved borrowers. Prior to this meeting, we may request additional information. During the site visit, the borrower, with the assistance of a representative of The Carrot Project, will complete the Debt Service Coverage (Exhibit A).

(4)For all conditionally approved borrowers your application will be forwarded to Vermont Community Loan Fund for final review.

TERMS AND ELIGIBILITY

The terms and conditions of The Carrot Project Agriculture Loan Program differ from VCLF’s general loan program and are described below.

Loan Terms

Loan amounts from $5,000 to $35,000

The interest rate is 7%

Loan Terms from 1-6 years. There is no penalty for early payment.

 If the loan is used for fixed assets, inventory or receivables, the purchased items will be used as collateral to secure the loan. VCLF may also require security in the form of personal guarantees, collateral on personal or farm assets, or a co-signer.

Eligible Borrowers

To be considered for a loan, farms and other businesses must meet the following qualifications:

Farms:

Annual gross revenue of $499,999 or less

Ownership: farm property must be owned or leased by the applicant; leases should be in effect for at least the payment period of the loan.

Preference will be given to family farms as defined by the USDA’s Economic Research Service.

Applicants must be engaged in cultivation of farm, forest, or aquatic products.

Food System Enterprises:business involved in processing, storage or distribution of agricultural products are eligible if:

The business has less than 50 employees

The source of the ingredients or materials from which the product is produced is primarily within Vermont and/or nearby states (although the points of sale are not required to be within this region)

Businesses whose primary purpose is to process, add value to, store, or act as distributors for local agricultural products are eligible. For example: on-farm farm stands, cheese-makers, butcher shops, produce delivery companies and agricultural co-ops, ARE eligible when adding value.

Agricultural industry support services such as veterinarians, feed & fertilizer stores, and retail outlets are not eligible.

Eligible Uses of Loan

Capital investments and expenses that improve efficiency and/or quality, and/or expand production and sales.

Repairs necessary to maintain operations.

Short-term operating needs, such as inventory, supplies, and/or labor for expansion.

Emergency funds to deal with business interruptions due to fire, natural disasters, or other unforeseeable events.

If any of the following apply to your situation, this program is not suitable for you at this time.

You are delinquent on any federal debt or child support.

You would like to use the loan to refinance debt.

You would like a line of credit.

Step 1: Prequalification Questionnaire

Please respond to the following questions. You may add your responses below, complete this over the phone, paste the questions into an email, or draft your own document. If you do the latter, please maintain the order of the information and include the question number and question, so that the loan reviewer can understand what questions you are responding to.

(1)Applicant’s name(s), physical address, and contact information

(2)Age and ethnicity (optional)

(3)One to two sentence description of your business:

(4)If a farm, how many productive acres do you actively farm and own? Lease? What is the acreage for each? If a non-farm business, please explain your base of operations (number buildings, leased or owned, etc…)

(5)Years in the business and years in current situation:

(6)Is your business a sole proprietorship, a partnership, LLC, S-Corp, C-Corp, or other?

(7)Approximate annual business revenue and approximate annual net income:

(8)What are your primary markets or customers and how long have you been working with them?

(9)Approximate off-farm or other household income: (income from spouse, rental income, additional employment)

(10)Number of employees or interns:

- Part-time:

- Seasonal:

- Full-time:

(11)Purpose of loan requested (no more than 1-3 sentences):

(12)Amount of loan requested:

(13)How many years do you think you’ll need the loan (1-7 years)?

(14)How would the requested loan help you maintain or increase productivity and financial viability, or decrease your ecological footprint?

(15)List any other lenders and the requested amounts that you have approached for the same financing or are approaching for other financing:

(16)Has another lender turned down your application? What lenders? Reason(s) for loan denial?

(17)What are your total assets? Please list items and approximate value. If you owe money on some of these assets, please list the amount in question 18.

(18)Are any assets being used as collateral for another loan?

(19)Total Liabilities: Please list the amount and type of any debt and approximate monthly payments.

-Bank Debt:

-Mortgage:

-Car Loan:

-Other:

(20)Do you have a business plan and how or with whom was it prepared?

(21)Have you ever declared bankruptcy? Have you ever had loan or credit card accounts with serious delinquency or charged off or sent to a collection agency? If yes, please explain.

Business Narrative: Please include a bio or resume about yourself and a short description (1-3 paragraphs) and history about your business that includes your vision or goals. Submit your response by e-mail to , by mail to: The Carrot Project, PO Box 1593, Northampton, MA 01061. Questions? Call Benneth Phelps at 413.650.6151

Step 2:Application

After completing the prequalification questionnaire (Step 1) and if requested by The Carrot Project, please provide the information described below. If mailed, applications must be postmarked no later than the application deadline.

Fees

Application fee of $50.00payable to The Carrot Project.

Administration fee of $50.00 due at closing.

Expenses incurred for the recording of collateral documentation and anticipated discharges of such documentation, due at closing.

DOCUMENT CHECKLIST

Once your prequalification is accepted, please request copies of the Vermont Community Loan Fund documents from Benneth Phelps, . You may request examples or templates for any the required documents.

If you would now respond differently to any of the questions in the prequalification questionnaire, please update your prequalification to include these changes with your financial and business information.

REQUIRED ITEMS

Completed Vermont Community Loan Fund loan application forms

  • Not all portions of the application will be applicable to your business. Please complete all relevant sections.

Completed business plan (see checklist included in application)

Personal and business (if separate) tax returns for the three most recent years

Three years historical Profit and Loss statements unless operating less than 3 years

Current Balance Sheet

Projected Monthly Cash Flow: A minimum of 12 months projected monthly, continued annually for 2+ years.

Important Notice (below)

Application fee of $50.00, please make your check out to “The Carrot Project”

Optional – brochures, point of sale literature, copies of advertisements, etc.

Other supporting documents may be requested depending on the loan purpose.

Submit your response by mail to:

Benneth Phelps, The Carrot Project, PO Box 1593, Northampton, MA 01061

Electronically send to:

If you have questions or need assistance preparing your documents please contact:

Benneth Phelps at 413.650.6151, or

IMPORTANT NOTICE

The applicant’s loan application shall be processed and reviewed by The Carrot Project. Vermont Community Loan Fund shall make final determinations as to applicant qualifications and approved loans shall be closed and solely administered by Vermont Community Loan Fund. The undersigned hereby represents and certifies to the best of his/her knowledge and belief that the information contained in the foregoing Statement and Exhibits A and B to the Loan Application or attachments hereto is true and complete and accurately describes the proposed project, and agrees to promptly inform Vermont Community Loan Fund of any changes in the proposed project that may occur. The applicant further authorizes the running of a credit check in support of this application.

Borrower / Farm Name
Address
Soc Sec Number / Tax ID
Signature / Date
Borrower / Farm Name
Address
Soc Sec Number / Tax ID
Signature / Date

The Carrot Project Agriculture Loan Program (VT), 20141