Sam Kane's 'common-sense' deal
January 25, 2010
by Steve Bjerklie
Ask and you shall receive. Well, sometimes you shall.
It worked for Sam Kane Beef Processors. The mystery, then, may be why more meat or poultry processors didn’t ask for help from the federal government in the form of stimulus funds. To date, only Kane has received any federal money under the stimulus program.
The funds, $25 million, are not a gift to the beef company; it is a loan guarantee through Kane’s chief lender, Heritage Land Bank in Tyler, Texas. “It was almost impossible to get loans no matter how financially sound you were,” Jerry Kane, the company’s CEO, told MEATPOULTRY.com. “But this was not our application, actually. It was more about our banking relationship.” The funds back 70 percent of Sam Kane’s loan through Heritage, which hastened the bank’s approval of the loan even though agricultural lending has generally tightened.
Rep. Solomon Ortiz, D-Texas, helped pave the way for the loan guarantee. Sam Kane, based in Corpus Christi, is one of 130 rural businesses – but the only meat packer to date – being assisted through USDA’s Rural Development Business and Industry Guaranteed Loan Program, which received $452 million in loan guarantees last year through the American Recovery and Reinvestment Act.
The guarantee, Jerry Kane said, “makes Sam Kane and a significant portion of our part of Texas more financially secure. It was a common-sense deal. A lot of jobs depend on our viability, and the loan helps us sustain our growth. This is a changing world with food safety and everything else. It takes money to keep up.”
He added: “We may be unique” in the industry as a beneficiary of stimulus funds, “but like a lot of things, you’ve just got to ask for it.”