Investment of $250 Million by Carlyle in FarmOp Capital to Enhance Agricultural Loan Services for Farmers
Carlyle, a global investment firm, has entered into a $250 million partnership with FarmOp Capital to provide flexible financing for independent row crop farmers across the U.S. This strategic move aims to expand capital access while carefully managing credit risk in a record-high national farm debt environment.
Under the agreement, Carlyle will purchase newly issued farm operating loans from FarmOp, enabling the latter to increase its loan origination capacity. This partnership is a testament to Carlyle's recognition of the critical role that working capital plays in sustaining independent U.S. farmers.
FarmOp Capital employs innovative, crop insurance-backed underwriting models. Their lending approach is based on crop production potential instead of traditional borrower balance sheets, using insured crops as loan collateral with milestone-based draw schedules and strict oversight. This structure provides strong risk management and underwritten protections while supporting farmers’ working capital needs in an asset-light, technology-enabled way.
The partnership fits within Carlyle’s broader strategy to scale asset-backed finance in specialized sectors. Akhil Bansal, Head of Asset-Backed Finance at Carlyle, expressed enthusiasm for the partnership with FarmOp Capital, highlighting its unique platform in the agricultural finance space.
Gregory Gudis, a Principal on Carlyle's Asset-Backed Finance team, emphasised the importance of working capital for independent U.S. farmers and the partnership's role in expanding access to flexible financing for growers who have historically lacked suitable credit options.
The partnership represents an opportunity for both Carlyle and FarmOp Capital to collaborate and bring innovative solutions to the agriculture industry. Keir Renick, CEO of FarmOp Capital, stated that the partnership will drive growth and stability for both the company and its customers.
Mayer Brown served as the legal advisor to FarmOp Capital in the transaction, while Paul Hastings advised Carlyle. Akhil Bansal praised FarmOp's unique platform that combines technology and innovation to support farmers.
In summary, the partnership between Carlyle and FarmOp Capital significantly enhances financing innovation for independent row crop farmers, providing flexible, crop-backed loans that expand capital access while carefully managing credit risk. This strategic move by both parties strengthens their presence in the agricultural finance sector.
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