Texas Department of Agriculture Interest Rate Reduction (IRR) Program

The Interest Rate Reduction program (formerly known as Linked Deposit program) allows eligible applicants to borrow money from a bank at a lower interest rate than they might otherwise.  The lender must be a financial institution that makes commercial loans and is an approved depository for state funds.  The lender and the borrower determine the repayment, maturity, and collateral for the loan.  Interest rates vary, but many borrowers attain savings of several percentage points on their interest rate. For additional program details, please visit our website at www.agr.state.tx.us.

The program provides assistance to both agricultural and non-agricultural businesses in rural areas. 

Eligibility

An eligible applicant must be in the business or entering the business of providing nonagricultural goods or services in rural Texas.  The business must be located in a non-metropolitan statistical area, an unincorporated area, or a city with a population under 20,000 that does not adjoin another city or group of cities with an aggregate population of 50,000 or more.  Preference will be given to applicants who create or retain employment in a rural area. The maximum amount available for rural, non-agricultural, businesses is $250,000.

Use of Funds

Funds must be used to encourage the development or expansion of businesses in a rural area. 

Agricultural Businesses

Eligibility

An eligible applicant in the State of Texas must be in the business or entering the business of:

·         Processing and marketing agricultural crops or livestock; the maximum amount of available for loans in this category is $500,000

·         Producing alternative agricultural crops or livestock, including certified organic production; the maximum amount available for loans in this category is $250,000

·         Producing agricultural crops or livestock, the production of which has declined markedly because of natural disasters; the maximum amount available for loans in this category is $250,000

·         Producing agricultural crops using water conservation equipment; the maximum amount available for loans in this category is $250,000

·         For the development of water conservation projects for agricultural production purposes; the maximum amount available for loans in this category is $250,000

Use of Funds

Eligible use of funds are identified in the program rules and may include:

·         Agriculture-related operating expenses;
·         Purchase or lease of land;
·         Purchase or lease of fixed assets or improvements; or
·         A loan under the natural disaster category may be applied to existing debt for applicants eligible to
          participate under this program only under limited circumstances as identified in the program rules.

For further information or assistance, please contact:

        Sajeewa “Sage” Chandrasoma

Texas Agricultural Financial Authority

Phone:  512/ 463-7512    Email:  sajeewa.chandrasoma@tda.state.tx.us