Pistachio file photo

Direct ag lender PACT Capital announced its financing of a $20 million permanent loan secured by 1,400-plus acres of pistachios in the Central Valley, extending its portfolio as it seeks to continue serving farmers throughout California and Arizona.

The borrower, a farmer and marketer of both conventional and organic pistachios, was seeking a long-term lending relationship to assist with growth and new development, according to a PACT Capital news release.

“The credit facility we provided allows the borrower to improve cash flow from a reduced cost of capital while recapitalizing its balance sheet through a portion of cash out,” said PACT Capital’s President and CEO Adam Mortanian. “We’re proud to have been able to play a role in the ongoing growth of yet another farming organization.”

Leveraging decades of farming experience and through institutional capital management, PACT Capital has been rapidly expanding its permanent agriculture lending division in the Fresno area, according to the release.

The Los Angeles based company provides borrowers with short- to long-term permanent facilities as well as real estate lines of credit secured to farm and ranch land. By leveraging real-world farming experience and employing local credit decisions, expert cash flow analysis and Sustainable Groundwater Management Act (SGMA) mitigating techniques, PACT continues to support farmer relationships in the wake of rising SGMA implications, compressed commodity yields and increased labor costs, according to the release.

“Nothing is consistent with farming, and with the recent implementation of SGMA, there has been added uncertainty for our farmers,” said Tyler Shegerian, chief operating officer. “Many of our clients are seeking guidance and a certainty of execution, which is what we provide.” 

Enacted to halt overdrafts and bring groundwater basins to balanced levels of pumping and recharge, SGMA requires local agencies to adopt sustainability plans for high- and medium-priority groundwater basins.

Likewise, farmers are restricted from using a specific amount of water to care for their land and crops. If the threshold is exceeded, farmers are penalized for pumping more than what would be considered a sustainable yield and would be required to pay a fee per acre-foot of water pumped.

As the state continues to extend new policy and adapt to ongoing drought conditions, farmers and landowners have been affected by SGMA limitations, creating caution among real estate lenders.

As a result, PACT’s innovative SGMA mitigation management and expert water analysis continues to help fill the gaps.