SBA loans for turkey, duck and other poultry growers

What lenders check

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

A lender reviewing a loan to turkey, duck and other poultry growers looks at the business's numbers and these items for the trade:

• The processor or buyer contract for the species raised, and how many flocks it commits to take each year
• Brooder and grow-out barn capacity for the species raised, since turkeys and ducks need different housing and stocking than chickens
• For farms that sell direct, the on-farm processing exemption or licensed processor agreement and the state limits on volume

Common uses of the money

Businesses like these use SBA loans for:

• Additional grow-out barns or range shelters to raise more birds in each cycle
• Plucking, chilling and packaging equipment for a small licensed processing room
• Poults or ducklings for the next flock, bought before any bird from it is sold

Collateral

Barns, brooder houses and farmland are the usual collateral, since live birds can be lost to disease and add little security.

How much they borrow

39% of these loans were $500,000 or less, the range where SBA Express is available.

The median loan was $750,000, larger than the $150,300 median for all SBA 7(a) loans. Half of the loans fell between $355,000 and $1.35 million. The most common size band was $1,000,001 to $2,000,000.

By business age, 41.5% had operated for more than 2 years and 12% for 2 years or less. 37% were startups opening with the loan.

How the money comes

19.5% of the loans went through SBA Express and fewer than 5 were lines of credit. The median term was 15.5 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 186 months (15.5 years). 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, 15 of 41 (37%).

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

Compare every state on SBA loans by state.

How often these loans went bad

0% of 73 seasoned loans were charged off, below the 3.6% rate for all SBA 7(a) loans.

None of the 73 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. By dollars, 0% of the approved amount was charged off.

SBA size standard

NAICS 112390 has its own size standard.

For NAICS 112390, SBA's size standard is $3.8 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).