Rural Business Assistance Programs
Frequently Asked Questions
2017 Maryland Value Added Producer Grant
(Capital Assets Option)
Who can apply?
Farmers, forest products operations, and seafood processors who plan to expand or diversify their operations with “value-added” products. Agricultural cooperatives may also apply. Government or educational organizations may not apply, although they may provide assistance to successful applicants in implementing the project.
What is the minimum or maximum amount of grant funds that I can get?
The minimum grant amount has previously been set at $2,500 and the maximum will be around $10,000. The funds must be matched on at least a one-for-one basis with funds provided by the grantee.
When can I apply?
The grant program is traditionally announced in mid to late summer.
What projects may qualify for funding?
Capital asset-type projects designed to help farmers, forest product operations, and seafood processors to expand or diversify their business operations. This includes, but is not limited to, the following:
- Production buildings and major fixtures
- Livestock or seafood processing facilities
- Fruit, vegetable, or wood processing facilities
- Creamery processing equipment
- Manure digesters
- Optimization systems for maximizing fiber yield recovery
- Dry kilns, shavings mills, sawdust dryers, and in-woods chippers
What projects specifically do not qualify?
Common agricultural implements such as tractors, combines, pick-up trucks, and other such farm vehicles are not eligible to be funded under this program. Commercial banks, farm credit associations, and MARBIDCO have loan programs available that help to finance these purchases. An individual piece of equipment costing less than $5,000 is also not likely to be eligible unless it is an essential purchase relating to a larger value-added project.
Ineligible expenses include, but are not limited to, the following:
- Any expense incurred prior to submitting a current grant application to MARBIDCO
- Any expenses that do not directly relate to the value-added product
- Tractors, combines, sprayers, or similar common farm implements and attachments thereto
- Any self-propelled vehicles except certain vehicles used in timber processing
- Property acquisition costs
- Mortgage refinancing
- Cost of borrowing (points and other fees)
- Site plan and construction permits
- Wages paid to applicant or employees
- Solar or wind energy projects
- Furnishings, fixtures, or equipment considered personal (non-business) property
- Machine storage, workshops, housing, classrooms, etc.
- Any portion of expense for which the applicant pays a contractor in merchandise or service in lieu of cash
- Attorney’s fees and consultant’s fees
- Fees and/or costs not consistent with eligible costs
Does the size of my operation make a difference?
Any size operation can apply, as long as you have been in business for at least two years and meet the other requirements.
Do I have to do business in Maryland?
Yes, the project must be located in Maryland.
What must be included with my application?
- Proof of matching funds equal to the grant funds requested
- Tax returns for the last year (including a Schedule F, Form 1120S, or Schedule C)
- Business plan showing: (a) how the production facility or business operation will remain ongoing for at least seven years; (b) how the project will increase sales, retain or add jobs, etc.; (c) the market(s) to be served and project cost estimates, and (d) how you will comply with all governmental requirements.
For more on developing a business plan contact your local extension agent or SBDC office, or see http://www.marbidco.org/business/BusinessPlanningGuide.pdf.
Does it have to be a single piece of equipment?
No. For example, you might need equipment and a building to house it.
Can I use grant funds to hire someone to operate the equipment?
No. Grant funds can be used only to purchase the equipment or facility.
How closely related to my current operation does the new project have to be?
The intent is to encourage business expansion or diversification. The important thing is that you show in your business plan that you have the knowledge and resources to make the project successful.
What if I received a Maryland Value-Added Producer Grant (Capital Assets Option) from MARBIDCO previously?
- Your open grant fund account must be closed out (i.e., no funds remaining);
- You may not receive more than $30,000 in aggregate funding.