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FAQ Participated Loans - Borrowers

Steward Team Updated by Steward Team

At Steward, we strive to offer a simple, accessible, and compliant means for farmers to access capital. We appreciate that Steward's framework may be unfamiliar to many, so below we've outlined answers to some of Steward's most frequently asked questions. 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 sustainable agriculture. 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 decisions align 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 business 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 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 agriculture businesses with loans as low as $10,000. These types of businesses are generally ignored by traditional financial institutions who instead want to provide large amounts of financing to long-term businesses with significant credit history. 

  • Flexibility: We offer flexible payment terms on the business loans we make, such as providing a period of accrued interest after the loan is disbursed so the funds can be used to generate revenue before starting to make repayments. We are able to customize the loan's term and structure based on the unique circumstances of each borrower. This is fundamentally different from traditional financial institutions where they often only offer set financial products with little to no room for customization. 

  • Growth: We lend to support the acquisition of land, infrastructure, equipment and operations based upon the future potential of the business, providing a pathway to growth and scale, whereas most traditional finance is only lending based on historical cash flow. 

  • Values: Steward Holdings (US) Inc., a Public Benefit Corporation, is a mission-driven entity that supports regenerative practices and takes into account values and positive externalities when making credit and underwriting decisions, which is also important to our participating lender community. Our primary purpose is to provide access to capital that advances sustainable, regenerative agriculture businesses. 

  • 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 global commodities. 

  • Advisory Services and Sector Expertise: Each application for a loan 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 farm has ongoing access to the expertise of the "Farm Steward" and other paid add-on supporting Farm Services, such as bookkeeping, grant writing, and e-commerce support. 

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

A participated loan is a recognized commercial lending structure. Steward Lending makes loans to individual farms, like yours, for specific commercial purposes. To support Steward, qualified individuals (those who regulators specify as “sophisticated lenders” or investment institutions) 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”. 

Can I get a loan for any reason?

No. Steward is a private commercial lender. This means we lend money exclusively to businesses and only for specific commercial purposes. Most of our loans are intended to be used to purchase specific commercial assets, such as land, infrastructure, or equipment (i.e. tractor, hoop house, refrigeration, etc.), and in certain cases, for operations. Our loans may not be used for spending that is not related to your agricultural business. That’s called consumer lending, and it's not what we offer at Steward.

If you plan to use a loan from Steward to purchase agricultural land with housing on it, the housing must related to the agricultural use (i.e. farm owner/worker housing), and depending on the state there may be additional restrictions.

You can contact us if you have questions about your planned use of funds and whether the qualify for a loan from Steward. 

Do you operate in all fifty US states?

Nearly, but not yet! We do operate in most states and are always looking to expand. To find out if we do business in your state, contact us at support@gosteward.com.

Are people in my community lending me money directly? 

Not exactly. The only one lending you money is Steward. Those in your community are supporting Steward by participating in your loan, and in turn, Steward supports you by providing the capital. Participating lenders are purchasing a piece of Steward Lending’s loan. Participating lenders do not have any direct financial relationship with you or your business. Further, those who are participating in your loan are 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 your business by purchasing your products! 

Am I selling stocks in my business or issuing bonds?

Nope! Stocks and bonds are referred to as “securities,” which are general investment vehicles in a particular company that are regulated by the Securities and Exchange Commission, or the “SEC”. Our loans, in contrast, are secured commercial loans directed to a specific lending community. They are not securities. 

How much can my sustainable agriculture business borrow?

First-time borrowers are generally limited to microloans - up to $50,000. That said, all of our loans are customized to fit your needs, and we can tailor the loan to fit your circumstances.

What about security for my loan? What if I can’t repay it?

All of Steward’s loans are secured. A secured loan means that your business as a borrower, has to “put up” collateral to secure repayment of your loan. Just like any other loan, this means that if your business were to default on the loan, Steward would have access to specific assets to use to ensure we have the funds to make repayments to the participating lenders. Secured loans are the norm, providing a level of comfort to participating lenders that there are funds to make repayments on the participations they are buying.

Steward has a team that works with our borrowers throughout the loan cycle. While we do take a security interest and collateral for the loans, our first approach when an ag business is struggling to repay their loan is to work with them on their business plan, brainstorm new markets, find new opportunities and partner with them to get them back on a path to meeting scheduled repayments.

What collateral do you require to secure my business’s loan?

The short answer is that it depends. When you apply for a loan from Steward Lending, our credit team will work with you to evaluate your available assets and determine what sort of collateral is appropriate for your loan. We’re flexible on this approach and will work with you to find a structure that is appropriate for your loan, while at the same time providing confidence to participating lenders in the security of our loans.

Can anyone purchase loan participations from Steward to support my loan?

Not just anyone! Our participated loan product is only right for certain purchasers. These purchasers could be institutional buyers (such as a bank) or private buyers (such as a private equity fund). Individuals who are deemed to be 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 transaction such as this, who have the funds to lend, and can bear the potential loss of their loan principal. No loan repayment or anticipated proceeds are ever 100% guaranteed; lending involves assumed risk. But Steward goes to great lengths to ensure that all risk is minimized as much as possible to protect participating lenders. Individual purchasers certify to us upon checkout that they meet these criteria. Above all, the primary criteria for becoming a participating lender is the desire to support sustainable agriculture through our curated portfolio of farms, ranches, fisheries, and product producers. 

Is it up to me to find all of these participating lenders?

No. We manage the contractual relationship with the participating lenders. That said, we generally lend to sustainable agriculture businesses that are well established and have a strong network of community support. We want to encourage general participation in the sustainable and regenerative food & products movement, and we believe that for businesses to be sustainable and successful, they need community involvement. Therefore, we do ask our borrowers to secure some participating lenders from their network and community. 

What do I tell people about participating in my loan? 

Because we’re dealing with a financial product, we want to make sure that the messaging around it is clear and accurately describes how our loans are structured. For this reason, we’ll put together a “Marketing Toolkit” that will provide you with the appropriate messages to share and templates to communicate with your network.  In order to ensure a clear, correct, and compliant message, we kindly ask that you stick to our toolkit when marketing your project. If anyone has any questions you feel you can’t answer about Steward Lending or your offering, just send them to gosteward.com. You can also email us at support@gosteward.com

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 in an offering that has been approved by the SEC. Steward Lending only deals in 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 piece of your business; they’re just participating in our secured loan to you.

Is this a donation? Is it tax-deductible?

No. A donation is a contribution or a gift, whereas these are loans, and that means money is paid back with interest as the loan is repaid. Steward Lending is not a 501(c)(3) charitable organization, but we do have one! If you’re interested in making tax-deductible donations to support worthy causes in sustainable agriculture, contact us at support@gosteward.com to learn more about The Steward Foundation.

Am I responsible for repaying the participating lenders?

No. Your responsibility is to Steward Lending per our loan agreement. As your lender, we’ll handle the payments we’re required to make to the participating lenders pursuant to our separate contracts with them. 

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