Four Important Steps on How to Get Farmer Loans Conveniently
The Farm Service Agency or FSA is the authorized agency under the U.S. Department of Agricultural that directs and guarantees different farm operating loans through credit. FSA offers multiple farm loans programs that provide great opportunities for family-size farmers to operate ranches or farms. It also facilitates farming opportunities for beginning farmers, women, and ethnic farmer groups.
Farm Service Agency also helps FSA customers operate direct-selling and full production of specialty crops. It also supports youth organizations working on income-producing agricultural projects. Farmer loans are offered in different types of loans including land contract guarantee, guaranteed loan, or direct loan according to the farmer capacity. Here are the four recommended steps on how to get a farmer loan.
Choose the appropriate farm loan
Farmer loans are available in different types of loans with the corresponding term of payment based on payment structure and loan composition. Always make an inquiry on the availability of each farmer loan classification.
This type of farmer loan enables lenders to provide credit for farm operators who were denied of a loan application from private or commercial funding sources. Farmers are entitled to receive credits to help them expand farming operations or improve existing farmland conditions.
Direct Operating Loans
Farmers have the chance to finance general farming operating expenses including fuel, farming equipment, and chemical fertilizers. In some cases, they purchase additional farming crops, livestock feeds, and pest control.
Microloans address the financial need of beginner farmers or augment existing farming expenses for a minimum cost.
Direct Farm Ownership Loans
This type loan enables farmers to purchase land and to enlarge their farm or ranch through procurement. Oftentimes, they build new structures and farming facilities such as storage and irrigation systems to widen the coverage of their farming operations.
Emergency loans are provided to help farmers recover from physical losses made by natural disasters and drought. Farmers usually purchase new crops, fuel, and fertilizers for refarming operations.
Inquire for farm ownership or farm operation loans from FSA
After you choose the type of farmer loan you desire, check with the FSA for the availability of the loan program. FSA may offer these farmer loans in a limited number of slots due to funding availability. Direct farmer loans are guaranteed by the Farm Service Agency ranging between $300,000 and $1,199,000.
Farmer-customers will determine the loan amount according to their financial capacity. Farm ownership loan has a maximum payment term of 40 years while the farm operating loan can be paid within 1 to 77 years. The approval of the loan amount depends on the farmer’s credit record, scope of farming operations, and capacity to pay through harvest projection.
Submit the application forms
Farmer-borrowers are expected to fill out the information sheet and directly submit the forms to FSA located in your community. For cooperative groups, FSA also offers USDA Industry Guaranteed Loan and USDA Rural Development Business program for community-based farming production. Farmers are entitled to the larger loan amount and payment term that ranges between 7 and 30 years.
Local banks also provide agricultural loan programs in case you need additional funds. Consider submitting a business plan together with other requirements in order for the bank to evaluate your potential and business goal.
Choose the type of loan that gears towards sustainable agricultural development
Several FSA farmer loan programs are developed in relation to the sustainable community, soil and water conservation, agricultural land protection, and organic farming. Select the loan which you think will preserve the natural environment while farming operations are carried out. There are also loans related to community development, research, and nutrition management to help develop your farmland without damaging nearby areas.