At first unable to refinance its 43,000-square-foot warehouse when a 10-year mortgage note expired, wholesale distributor Watsonville Coast Produce eventually secured a $4.6 million loan from Santa Cruz County Bank.

The U.S. Department of Agriculture was a guarantor on that loan, issued in 2009, under its Business & Industry Guaranteed Loans program.

Judith Canales, the USDA’s rural business service administrator, toured the company March 7 with Congressman Sam Farr, D-Carmel, and bank officials.

Watsonville Coast Produce has $30 million in annual sales and about 85 fulltime employees, said Doug Petersen, vice president. But two years ago the future seemed in doubt when the company ran into difficulties financing the warehouse, built in 1999. The reasons remain unclear.

“Our original mortgage was a 10-year note,” Petersen said. “We had to refinance when it matured, but none of the big banks wanted to do it. To this day we don’t know why. We had good credit.”

The USDA guarantees up to 80% of loans under $5 million, and less on higher amounts. About $1 billion is lent annually under the program. It temporarily hit $3 billion with the federal stimulus package of 2009 — a time when banks were issuing fewer loans.

Petersen said he didn’t realize at first that the USDA had a role in the Santa Cruz County Bank loan.

“We’re just glad it was available,” he said. “The timing was good.”

Watsonville Coast Produce distributes to California customers from the Central Coast to the Central Valley.