S.B. No. 2875 establishes the Texas Small Farm Recovery Microloan Program (TSFRMP) aimed at providing low-interest microloans to eligible small farms in Texas. The bill defines a "Small Farm" as an agricultural operation with annual revenue not exceeding $500,000 and outlines "Economic Hardship" as financial distress due to various qualifying circumstances. To qualify for a loan, applicants must be the owner or principal operator of a small farm, demonstrate financial hardship, engage in agricultural activities, and submit a viable business plan. Loan amounts will range from $5,000 to $50,000, with a fixed interest rate not exceeding 2% annually and a repayment period of up to five years, including a possible grace period.

The bill also details the permissible uses of loan proceeds, which include purchasing seeds and livestock feed, equipment repairs, covering labor costs, recovery efforts after disasters, and marketing expansion. Applicants are required to submit supporting documentation, and the department will review applications within 30 to 60 days, ensuring timely fund disbursement for approved applicants. Additionally, the department will coordinate with financial institutions and nonprofit organizations to manage the program and provide technical support and financial literacy training to participants.

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