by: David Marrison, OSU Extension Educator
New and beginning farmers, returning veterans and disadvantaged producers may qualify for a new micro-loan program being offered by the USDA Farm Service Agency.
This program will offer applicants a micro-loan designed to help farmers with credit needs of $35,000 or less. Farms seeking a smaller loan for start-up or operational now have a new source of revenue. The loan features a streamlined application process built to fit the needs of new and smaller producers.
The new micro-loan program is aimed at bolstering the progress of producers through their start-up years by providing needed resources and helping to increase equity so that farmers may eventually graduate to more traditional commercial loans. Producers can apply for a maximum of $35,000. Microloans can be used for all approved operating expenses as authorized by the FSA Operating Loan Program, including but not limited to: Initial start-up expenses; Annual expenses such as seed, fertilizer, utilities, land rents; Marketing and distribution expenses; Family living expenses; Purchase of livestock, equipment, and other materials essential to farm operations; Minor farm improvements such as wells and coolers; Hoop houses to extend the growing season; Essential tools; Irrigation; and Delivery vehicles. As their financing needs increase, applicants can apply for a regular operating loan up to the maximum amount of $300,000 or obtain financing from a commercial lender under FSA’s Guaranteed Loan Program.
The repayment term for the loans may vary and will not exceed seven years. Annual operating loans are repaid within 12 months or when the agricultural commodities produced are sold. Requirements for managerial experience and loan security have been modified to accommodate smaller farm operations, beginning farmers and those with no farm management experience.
Producers can access an information sheet on the micro-loan program by clicking on this link
Additional information on the FSA micro-loan program may be obtained at local FSA offices or through the FSA website at http://www.fsa.usda.gov.