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FAQ Participated Loans - Lenders

Steward Team Updated by Steward Team

At Steward, we strive to offer straightforward and compliant means for farmers & food producers to access loans. We appreciate that our lending model may be unfamiliar to many, so below we've outlined answers to some of common questions below. We hope these help! 

Who is Steward Lending?

Steward Lending LLC is a non-bank financial institution that acts as a private commercial lender exclusively to support regenerative agriculture businesses. Our parent company, Steward Holdings (US) Inc., is a public benefit corporation and a certified B Corp. This means we consider more than just profit when making decisions, instead ensuring our works aligns wholly with Steward's mission: to promote economic and environmental stewardship through regenerative agriculture.

Is Steward Lending a bank?

Steward Lending is not a bank. As a private commercial lender, Steward makes business loans to entities such as yours that are exclusively commercial in nature. We don’t lend money for people to buy homes, nor do we extend credit to individuals who may just need money. We don’t lend money to farms & ranches that want to buy agricultural land that has a residence on it. We also do not take deposits.

In what ways is Steward different from a traditional lender, like my local bank?

    • Size: We are willing to support regenerative agriculture businesses with loans as low as $10,000. These types of businesses are generally ignored by traditional financial institutions that instead want to provide larger amounts of financing to long-term businesses with significant credit histories. These financial institutions also tend to prioritize lending to larger agriculture operations, not human-scale farms, ranches, and food producers.
    • Flexibility: We believe in customization, not cookie-cutters. Steward offers flexible terms on the business loans we make, from setting the interest rate to providing a deferment period after the loan is disbursed so the funds can be used to generate revenue before starting to make repayments. We are able to customize each loan's term and structure based on the unique financial circumstances of each borrower. This is fundamentally different from traditional financial institutions where they often only offer set financial product with little to no room for customization. 
    • Growth: The opportunity is in what lies ahead. We lend to support the future potential of the business (acquiring land, infrastructure, equipment and operational improvements), providing a pathway to grow and scale, whereas most traditional finance is only lending based on historical cash flow. 
    • Values: Steward Holdings (US) Inc., a Public Benefit Corporation (B Corp), is a mission-driven entity that supports regenerative agricultural practices and takes into account values and positive externalities when making underwriting decisions. Things that not only we value, but are important to our impact-minded lender community. Our primary purpose is to make loans that advance regenerative agriculture businesses, the resilience of local communities, and the health of the environment. 
    • Diversity: We take a much broader perspective on the agricultural businesses and products we support, including niche growers and heirloom varietals, heritage breeds of livestock, and other natural products, whereas most traditional agricultural funding is solely limited to the major commodities. 
    • Advisory Services and Sector Expertise: Each loan application is vetted by a seasoned farmer who works for Steward, so that during our diligence process the loan candidate can explain their business, production, and opportunities for growth to someone who actually understands farming. Each borrower has ongoing access to the expertise of the "Farm Steward" and other paid add-on Services, such as bookkeeping, grant writing, marketing, and e-commerce support. 

What is a “participated loan” and how does it work?

A participated loan is a recognized commercial lending structure. Steward makes loans to individual agricultural businesses, like yours, for specific commercial purposes. To support Steward, qualified individuals (those who regulators specify as “appropriate or sophisticated lenders”) can buy a “piece” of the loan that Steward is making. These supporters are referred to as “participating lenders,” and they are buying a “loan participation” in your lending campaign. 

Am I loaning money directly to an agriculture business?

No. Participating lenders are purchasing a piece of a loan offered by Steward. Participating lenders do not have any direct relationship with the agricultural business. You’re not “investing”, no more than a bank that holds your home mortgage is an “investor” in your home. However, we definitely encourage our participating lenders to support our regenerative farm and food producers by purchasing their products! Some of the businesses to which Steward lends will actually provide product-based incentives to participating lenders who join in at certain levels. See each lending opportunity for details.

Are these loans secured or unsecured?

All of Steward loans are secured and interest-bearing. A secured loan means that the borrower has “put up” collateral to secure repayment of their loan. This means that if a borrower were to default on their loan, Steward would have access to specific business assets to use to ensure there are funds to repay loan participations. This is another way that the participating lenders can be comfortable that risk is bring mitigated and their loan participation will be repaid over time.

Am I buying stocks or bonds?

Neither. Stocks and bonds are what are referred to as “securities” which are general investment vehicles in a particular company that are regulated by the Securities and Exchange Commission (SEC). Our loans are secured private commercial loans directed to a specific lending community, and are not securities.

Is this Crowdfunding?

No. Crowdfunding implies investment in a business through an online offer of securities. This generally means multiple individuals or institutions are buying stock in your business on an approved platform through an offering that has been approved by the SEC. Steward only deals in private commercial loans at this time. Because there are many participating lenders in each of our loans, it's often confused that this is a form of “crowdfunding”. The participating lenders in our structure are just that⏤lenders not investors. They’re not buying a share in Steward or any of the borrowing businesses we fund; they’re simply participating in a secured, interest-bearing loan with Steward (who will use those funds to make a single loan to a borrowing agricultural business).

Can anyone from the general public purchase loan participations from Steward?

Many people can, but not just anyone. Participating in a Steward loan is only right for certain people. These purchasers may be institutional buyers (such as a bank) or private buyers (such as a private equity fund). Individuals identify themselves as sophisticated lenders can also purchase a participation in the loan.

Sophisticated lenders is a term for individuals who are familiar with financial transactions, are able to understand the risks of entering into a loan transaction such as this, who have the financial capacity to participate, and can bear the potential loss of their loan principal. No loan repayment or anticipated proceeds are ever 100% guaranteed; all lending involves assumed risk. But Steward goes to great lengths to ensure that any risk is minimized as much as possible to protect participating lenders. Individual participants certify to us upon checkout that they meet this criteria and are a sophisticated lender. Above all, the primary criteria for becoming a participating lender is the motivation to support the growth of regenerative agriculture. 

Is this a donation? Is it tax-deductible?

This is NOT a donation or gift. This is a loan that someone makes to Steward and then like any loan, we pay them back with interest over time. As a participating lender, they will receive a monthly loan repayment from Steward each month (after a deferment period) for the duration of the loan term.

Steward is not a 501(c)(3) charitable organization, but we do have one⏤we call it The Steward Foundation! If you’re interested in making a tax-deductible donation to support regenerative agriculture, please contact us at support@gosteward.com to learn more about The Steward Foundation.

How do I get repaid?

By becoming a participating lender, you are loaning Steward money to advance regenerative agriculture. We pool resources together and then make single, larger loans to farms & food producers in need of funds. In exchange for using your money to support our projects, we repay the principal you’ve loan us plus interest. The interest rate you receive is the same as the interest rate the borrower pays for its loan. All repayments will be sent directly to your Steward Wallet.

All money you provide to Steward when becoming a participating lender goes to fund the lending campaign you chose to support and will be returned to you (with interest) over time.

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