Small and large farms can secure multiple financing options for their solar energy projects. Many of the agriculture credit unions throughout the Midwest work with farmers to secure the loans needed for energy improvements. One of the leading funding opportunities for farmers and rural businesses is the USDA Renewable Energy for American Program (REAP).
The REAP program is a reimbursement program that can be either grants, guranteed loans or a combination of both. The applications are accepted throughout the year, but the deadlines for the two award cycles are April 1 and October 31. There are loan guarantees on loans up to 75% of total eligible project costs. Grants are available for up to 25% of total eligible project costs and
combined grant and guaranteed loan funding up to 75%. .
These are the specific terms:
-$5,000 minimum loan amount
-$25 million maximum loan amount
-Up to 85% loan guarantee
-Rates and terms negotiated with the lender and subject to USDA approval
-Maximum term of 30 years for real estate
-Maximum term of 15 years for machinery and equipment
-Maximum term of 7 years for capital loans
-Maximum term of 30 years for combined real estate and equipment loans
Applicants must provide at least 75% of the project cost if applying for a grant only.
Applicants must provide at least 25% of the project cost if applying for guaranteed loan, or guaranteed loan and grant combination.
Projects greater than $200,000 require a technical report.