BACKGROUNDER
Hog Industry Loan Loss Reserve Program (HILLRP)
The Hog Industry Loan Loss Reserve Program is designed to inject additional cash
into hog operations in the form of government guaranteed loans. This cash will help
free up operating credit and ease short term liquidity problems by converting short
term debt into longer term loans. The terms of the loans will be negotiated between
lenders and applicants but shall not exceed 15 years. Where possible, a maximum
10-year term will be encouraged.
Loan amounts approved by lenders will be based on a borrower’s business plan and
the size of operation, established from recent production and sales records.
Maximum loan amounts will be based on the following rates per animal produced
over the course of the last or current tax year:
• $85 per market hog
• $30 weaner
• $25 per iso weaner
Loan approvals will be established on a credible business plan, validated by lenders,
demonstrating that the borrower has reasonable potential to repay the loans and
maintain a viable agricultural operation.
Loans issued under the program will be at competitive commercial interest rates and
may be subject to various administrative fees charged by commercial lenders.
Security requirements for loans, including personal guarantees, will be at the
discretion of lenders who will consider the reduction in risk provided by the program.
Loans issued under the HILLRP must first be used to reimburse any outstanding
2008-09 Advance Payments Program (APP) advances.
A producer cannot receive benefits (loans or payments) from both the HILLRP and
the Hog Farm Transition Program.
Producers should consult with participating financial institutions starting in mid-
October for further details on the requirements necessary to qualify for the HILLRP
loans.
The application deadline is scheduled for March 1, 2010 but producers are
encouraged to present their business plans to lenders as soon as possible to ensure
access to the government-ba