Illinois 



Illinois founded a linked deposit program in 1980, 

 which has been recently expanded. Under the current 

 program, loans may not exceed $50,000 per borrower and 

 may be used only for operating costs (i.e., the purchase 

 of seed, feed, fertilizer, chemicals, crop insurance, 

 livestock, and production-related expenses). There is 

 no debt-to-asset limit. Participating banks establish 

 most eligibility requirements. Banks may charge 

 borrowers up to 2.5% more than the interest paid on the 

 state certificates of deposit. In 1985, Illinois 

 provided 9,960 loans under the program. These loans 

 totaled $176 million. 



Indiana 



Indiana initiated its linked deposit program in 

 April 1985. Under the program, $50 million has been 

 authorized for the purchase of certificates of deposit 

 with participating banks who must make loans at 8% 

 interest. State deposits are made at 52%. Program 

 loans are available for the purpose of providing 

 operating capital. Debt refinancing and cash rent are 

 not qualified uses for linked deposit loans. The 

 maximum loan amount is capped at $50,000. Eligible 

 borrowers must have a net worth of less than $250,000, 

 derive 75% or more of their gross income from farming, 

 have a debt/worth ratio of 1.25, and must submit a 

 financial statement. Under the program, 940 loans 

 totaling $33.5 million were made available. 



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