Understanding the USDA Timber Production Expansion

The U.S. Department of Agriculture (USDA) has taken a significant step toward revitalizing the timber industry and supporting rural economies with the Timber Production Expansion Guaranteed Loan Program (TPEP). This program offers new financing opportunities tailored for businesses in the timber and wood processing sectors, enabling them to expand, innovate, and contribute to ecosystem restoration.

Keep reading to learn more about the details of TPEP, its requirements, benefits, and its potential impact on the timber industry.

What Is the Timber Production Expansion Guaranteed Loan Program?

The TPEP and its loan are designed to provide financial support to eligible lenders offering loans to businesses engaged in establishing, reopening, retrofitting, expanding, or improving sawmills and other wood processing facilities. By doing so, the program addresses ecosystem restoration priorities, mitigates wildfire risks, and supports economic growth in rural areas.

Key Requirements for TPEP

The TPEP builds upon the framework of the USDA Business & Industry (B&I) program, with specific guidelines that applicants must meet:

1. Business Type

Eligible applicants include:

For-Profit Businesses
Nonprofit Organizations
Cooperatives
Federally Recognized Tribes
Public Bodies

Individuals conducting or planning to conduct business in the timber or wood processing sectors

2. Location Requirements

The project must be located in an area with fewer than 50,000 residents. Even if the business headquarters is in an urban area, funding eligibility extends to projects physically located in rural areas.

3. Eligible Uses

Loan funds can be used for:

Establishing, reopening, or retrofitting sawmills or wood processing facilities
Expanding or improving existing facilities
Developing markets for biomass and small-diameter materials
Supporting wood product innovation, such as biochar and mass timber initiatives
Implementing projects to mitigate wildfire risks, insect infestations, and disease

4. Raw Material Sourcing

A significant portion of raw materials must be sourced from federal or tribal lands designated as high or very high priority for ecological restoration. These areas can be identified using the TPEP Priority Areas Dashboard.

Benefits of the Timber Production Expansion Program

The TPEP provides numerous advantages for businesses in the timber industry, especially those operating in rural areas. Here are some key benefits:

1. Extended Loan Terms

Building Loans: Up to 30 years
Equipment Loans: Up to 15 years, far exceeding the typical five-year term for most equipment loans

2. Competitive Interest Rates

The program offers competitive interest rates, making it financially attractive for businesses looking to invest in long-term projects.

3. Flexible Equity Requirements

Equity requirements vary by project type:

New Construction: Up to 25%
Existing Entities: As low as 10%

4. High Loan Limits

Borrowers can secure up to $25 million in loans with no fees. When combined with other USDA programs, such as the Business & Industry (B&I) program and the Renewable Energy for America Program (REAP), funding can reach $50–$75 million.

5. Focus on Rural Development

Unlike conventional loans that often overlook rural projects, TPEP ensures funding is available for projects in rural areas, regardless of the business’s headquarters location.

Have further questions? Fill out the form below to contact Madison One and discover if your business qualifies for a USDA timber loan today.

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How the Timber Production Expansion Program Benefits the Timber Industry

The timber industry is central to rural economies and ecological restoration efforts. TPEP addresses critical challenges faced by the sector, providing opportunities for growth and innovation.

1. Revitalizing the Timber Supply Chain

TPEP encourages the reopening and modernization of sawmills and wood processing facilities, ensuring a steady supply of timber for various industries. This revitalization creates jobs in rural areas and supports local economies.

2. Supporting Ecosystem Restoration

By utilizing byproducts from forest restoration activities, TPEP aligns timber production with environmental conservation. This approach reduces wildfire risks, addresses overstocked forests, and mitigates the impact of pests and diseases.

3. Fostering Innovation

TPEP supports projects that explore new markets for timber byproducts, such as:

Biochar Production: A carbon-rich material with applications in agriculture and water filtration
Mass Timber Construction: A sustainable alternative to traditional building materials

4. Enabling Rural Businesses to Compete

Extended loan terms and flexible funding options empower rural businesses to compete with urban-based companies, ensuring a more equitable distribution of economic benefits.

5. Expanding Applications for Timber Products

The program opens new opportunities for businesses to expand the use of timber in various industries. For example:

Pallet Manufacturers: Can source materials from restored forests
Wood Stove Producers: Benefit from improved timber processing capabilities
Construction Firms: Gain access to high-quality mass timber products

How to Get Started

So how can you get started signing up for this new type of USDA loan? Take the following steps:

1. Identify a Lender

Eligible lenders include:

Federal and State-Chartered Banks
Savings and Loan Associations
Farm Credit Banks
Credit Unions
Community Development Loan Funds

2. Assess Your Eligibility

Review project location, raw material sourcing, and use the TPEP Priority Areas Dashboard to confirm eligibility based on restoration priorities.

3. Submit an Application

Applications are accepted until funds are exhausted. Collaborate with your lender to navigate the application process.

4. Reach Out for Assistance

For questions, consult the USDA Rural Development lender guide and contact a government-guaranteed lender like Madison One.

The Bottom Line

The Timber Production Expansion Guaranteed Loan Program is a game-changer for the timber industry, offering tailored financial support for businesses engaged in wood processing and ecosystem restoration. By providing longer loan terms, competitive interest rates, and high loan limits, TPEP empowers businesses to innovate, expand, and contribute to the economic and environmental well-being of rural communities.

For companies operating in the timber sector, this program represents an opportunity to achieve sustainable growth while addressing pressing ecological challenges. Whether you’re reopening a sawmill, exploring biochar production, or supporting mass timber construction, TPEP is here to help your business thrive.

Empower Your Timber Business With Madison One CUSO

Ready to take advantage of the USDA Timber Production Expansion Program? Madison One CUSO is here to help you navigate the process and secure the financing you need to grow. Contact our USDA loan experts today and turn your expansion goals into reality!

Understanding the USDA Timber Production Expansion

What Is the Timber Production Expansion Guaranteed Loan Program?

Key Requirements for TPEP

1. Business Type

2. Location Requirements

3. Eligible Uses

4. Raw Material Sourcing

Benefits of the Timber Production Expansion Program

1. Extended Loan Terms

2. Competitive Interest Rates

3. Flexible Equity Requirements

4. High Loan Limits

5. Focus on Rural Development

How the Timber Production Expansion Program Benefits the Timber Industry

1. Revitalizing the Timber Supply Chain

2. Supporting Ecosystem Restoration

3. Fostering Innovation

4. Enabling Rural Businesses to Compete

5. Expanding Applications for Timber Products

How to Get Started

1. Identify a Lender

2. Assess Your Eligibility

3. Submit an Application

4. Reach Out for Assistance

The Bottom Line

Empower Your Timber Business With Madison One CUSO

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