SBA loans for broiler chicken growers

What lenders check

Each lender sets its own checklist. SBA sets the basic eligibility tests.

A lender reviewing a loan to broiler chicken growers looks at the business's numbers and these items for the trade:

• The grow-out contract with the integrator, including its remaining term, the pay formula and any required house upgrades
• House age, count and equipment, such as ventilation, feeders and heaters, compared with what the integrator now requires
• Settlement sheets from recent flocks, which show pounds placed, feed conversion and what the grower was paid

Common uses of the money

Businesses like these use SBA loans for:

• New poultry houses or tunnel ventilation upgrades that the integrator requires to keep placing flocks
• Replacement heaters, feeders and fans, plus a backup generator to protect birds in a power outage
• A litter shed, spreader or composter for handling poultry litter

Collateral

Poultry houses and the land under them are the main collateral, and their value rests on the integrator contract staying in place.

How much they borrow

20% of these loans were $500,000 or less, the range where SBA Express is available.

The median loan was $1.33 million, larger than the $150,300 median for all SBA 7(a) loans. Half of the loans fell between $690,000 and $3.01 million. The most common size band was Over $2,000,000.

By business age, 24.5% had operated for more than 2 years and 12% for 2 years or less. 40% were startups opening with the loan, and 23% paid for a change of ownership.

How the money comes

2.1% of the loans went through SBA Express and fewer than 5 were lines of credit. The median term was 18 years.

Across all industries, 36% of loans went through SBA Express and 28% were lines of credit. Express counts here include Export Express.

The median term was 18 years (216 months). For equipment, SBA's maximum term is 10 years, or up to 15 years if the IRS asset class useful life supports it. For real estate, it is 25 years, plus any reasonable construction or renovation period. Source: SOP 50 10 8.1: App. 17, Para. A.2 (p. 390); App. 17, Para. A.3 (p. 390); 13 CFR § 120.212(c).

When farm land and structures are 51% or more of the proceeds, the maximum term is 20 years. When farm machinery and equipment are 51% or more, it is the useful life of the equipment, up to 15 years. Source: SOP 50 10 8.1: App. 17, Para. A.7 (p. 390).

Where the loans are

Mississippi had the most loans, 59 of 233 (25%).

Location is the state of the business, not of the lender.

These states have their own page for this industry, with at least 50 loans from October 1, 2019 to June 30, 2026.

• Georgia80 loans
• North Carolina59 loans

Compare every state on SBA loans by state.

How often these loans went bad

Fewer than 5 of 322 seasoned loans were charged off, against 3.6% of all SBA 7(a) loans.

Fewer than 5 of the 322 loans approved October 1, 2019 to September 30, 2022 were charged offcharged offThe lender wrote the loan off as a loss because it was not being repaid. by June 30, 2026. We show no rate, because a rate beside a group of known size would give the count away.

SBA size standard

NAICS 112320 has its own size standard.

For NAICS 112320, SBA's size standard is $3.5 million in average annual receipts. A business at or under the standard is small for SBA's purposes. To qualify, a business must fit the size standard for the applicant's primary industry in 13 CFR 121.201, measured in annual receipts or employees. SBA measures size on the date the application is accepted for SBA processing, or for delegated loans the date the lender approves the loan.

A business over the standard can still qualify under the alternative standard: tangible net worth of $20 million or less and average net income after federal income taxes of $6.5 million or less over the prior two fiscal years. Source: SOP 50 10 8.1: Sec. A, Ch. 1, Para. D.1 (p. 14); Sec. A, Ch. 1, Para. D.2 (p. 14); 13 CFR § 121.301(b)(2).