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Agricultural Lender

Drought Relief Guarantee Program

In July 2012, Governor Scott Walker declared a state of emergency for all 72 Wisconsin counties due to drought or abnormally dry conditions.

In response, WHEDA will provide $1.5 million in loan guarantees to help farmers in need. WHEDA’s Drought Relief Guarantee Program will provide a 90% guarantee on loans up to $15,000 for three years.  WHEDA will also provide an interest reduction payment to its lender partners which will allow for a lower interest rate loan for drought-affected farmers.

Use of proceeds

To provide assistance for extraordinary drought related costs related to:

  • Fertilizer, seed, fuel, pesticides, tillage services, crop insurance, and other service or consumable good necessary to replace or supplement an agricultural commodity adversely affected by drought.
  • Water delivery in connection with agricultural commodities adversely affected by drought.
  • Feed and associated expenses for animals to supplement feed supplies adversely affected by drought.


  • Farmer does not meet lender’s eligibility requirements for an assistance loan.
  • Farmer’s debt-to-asset ratio is at least 40%
  • Farmer’s assets, cashflow and managerial ability are sufficient to preclude voluntary or involuntary liquidation before the end of the term loan
  • Farmer is expected to lose 40% or more of their crops because of the drought conditions
  • The applicant individual or entity must be actively engaged in the farming operation
  • Farmer is current in child support payments and not in default on any WHEDA loans  

Terms and conditions

  • Maximum loan amount is $15,000
  • Guarantee term is 3 years
  • Guarantee is 90%
  • A one-time interest reduction payment of 3.5% is paid to the lender
  • Maximum interest rate to borrower is WSJ Prime + 2% on day of loan closing (ceiling of 7%), fixed for loan term, less the interest reduction payment of 1.167% (determined by taking the 3.5% interest reduction payment averaged over three years)
  • Maturity date is three years from the date of the note, but lender may extend to five years with notice. However, the guarantee does not extend beyond 3 years
  • Proceeds cannot be used to pay off or refinance other loans
  • Loan must be secured
  • Loan may be amortizing or interest only

Applications process

  • Farmers need to contact a WHEDA agricultural lender 
  • Lender and farmer complete the Drought Guarantee Application
  • Submit complete application package to WHEDA, including application fee, within 30 days of note date
  • WHEDA reviews the complete application and renders a decision within five business days
  • Applications will be accepted through December 31, 2012


  • Non-refundable application fee:
    • 1% of loan amount

Questions? Please contact WHEDA’s Economic Development Department at 800-334-6873 or Check back to this website for further program updates and application information.