CROP loan proceeds can only be used to pay for services or consumable goods necessary to produce an agricultural commodity. The agricultural commodity must be planted and harvested for consumption within the term of the loan. Livestock is eligible if purchased, fed and sold within the term of the loan.
WHEDA's guarantee is valid only on eligible uses of proceeds. Documentation verifying expenses may be requested at WHEDA's discretion. Eligible uses of proceeds are limited to:
· Fertilizer
· Seed
· Animal feed
· Pesticides and herbicides
· Land rent
· Equipment rental
· Equipment repair
· Custom hire
· Fuel
· Put options
· Hedging
· UCC filing charges
· Crop insurance
· Tillage service
· Feeder animals purchased and sold within the term of the loan
· Utility bills pertaining solely to the production of the agricultural commodity
· Labor costs directly related to planting and harvesting the agricultural commodity, excluding labor costs paid to the Farmer and spouse
WHEDA CROP application fee can be financed as part of the CROP loan, but will not be guaranteed
If the Lender is a Production Credit Association (PCA) or Farm Credit Service (FCS), a portion of the loan may be used to purchase PCA or FCS stock. When the loan is repaid, the stock must be redeemed and the proceeds applied toward the outstanding principal on the loan. Loan principal including stock purchase cannot exceed the maximum CROP loan amount.
