Rutherford announces harvest season low-interest loan program for farmers

</element><element id="paragraph-1" type="body"><![CDATA[State Treasurer Dan Rutherford is joining Illinois Farm Bureau officials to reveal better loan program conditions for Illinois farmers and lenders. Rutherford has committed to semiannual reviews of the Ag Invest program to ensure that interest rates remain competitive and the program continues to meet the needs of its participants. This program has been one of the largest agricultural linked deposit programs in the nation, but Rutherford determined early in his administration that changes were necessary to make this program more appealing. "Upon taking office, I made it my goal to make this program more attractive to farmers and to banks so that they will choose to offer Ag Invest loans in Illinois communities," said Rutherford. With Ag Invest, the Illinois State Treasurer's Office partners with eligible lenders to offer farmers below-market interest rate loans to be used for operating costs, equipment purchases, construction-related expenses and livestock purchases.

In changing the Ag Invest program, Rutherford wants to make sure each deposit is a better experience for the farmer and the lender. "The loan program must benefit the farmer, grower or agricultural producer with a discounted interest rate that they would not otherwise receive from local financial institutions," said Rutherford. "Another one of my goals is to provide security to the state's money by requiring financial institutions to pledge collateral for each deposit."

Here are some of the main changes borrowers and lenders will find in the Ag Invest program:

· An increased borrowing limit under Annual Ag Invest for individual farmers to $300,000 for an annual revolving line of credit.

· An increased borrowing limit under Annual Ag Invest for farm operations to $600,000 for an annual revolving line of credit.

· A more streamlined application process.

Rutherford also initiated better interest rates for borrower and lender deposit rates as of October 2011:

The bank deposit rate on an Annual Ag Invest loan is now 0.24 percent, down from one percent.

The bank deposit rate for a Long-Term Ag Invest loan is 0.62 percent for first two years, and is subject to re-pricing for the final three years of the five-year program.

The maximum allowable spread for financial institutions for Ag Invest programs is 3.5 percent.

* Rates are subject to change monthly, and are calculated based on 75 percent of the one-year moving average of one-year U.S. government agency notes as of the first of each month for Annual Ag Invest; 75 percent of the two-year moving average of the two-year U.S. government agency note as of the first of each month for Long-Term Ag Invest.

Illinois Farm Bureau President Philip Nelson is glad to see that Rutherford is making some much needed changes to this loan program for Illinois farmers. "This is another opportunity to put capital in the hands of our members, and we support that effort," said Nelson.

If you would like to find out more about Ag Invest, please visit the treasurer's website at www.treasurer.il.gov. To find a bank near you that offers Ag Invest loans, you can call the Ag Invest office at 217-557-6436.