|How to Get Farmer Loans - 6 Steps to Get Farmer Loans|
In order to get farmer loans from some agencies, you must own a farm or use the funds from the loan to purchase a farm. New farmer loans can often be obtained from the same sources, although small business loans may be more quickly obtained in some instances.
Step 1: Apply for a farm ownership loan or a farm operating loan from the FSA, or Farm Service Agency, which is part of the U.S. Department of Agriculture.
- Direct loans for farmers from the FSA are available up to a total of $300,000.
- Loans guaranteed by the FSA are available up to a total of $1,119,000.
- The term for repayment for either of the farm ownership loans cannot be more than 40 years. Loan repayment schedules for the farm operating loans are typically between 1 and 7 seven years in length.
- Funds from a farm ownership loan are typically allocated for purchasing new land, improving existing farmland, improvement or construction of new farm structures, promoting conservation projects, and to finance closing costs.
- Funds from a farm operating loan are usually used for standard operating expenses, equipment, repairs, and to refinance existing debt.
- Both types of loans have money allocated each year to be dedicated to new farmer loans.
- The Down Payment Program offers loans to new and socially disadvantaged farmers.
- Emergency Loans are available for farmers who have suffered losses due to a natural disaster or quarantine.
Step 4: Consider a USDA Rural Development Business and Industry Guaranteed Loan.
- These loans are available to farmers for a variety of purposes in amounts of up to $40 million.
- The term of the loans vary but generally range between 7 and 30 years.
- Many loans are available for improvements related to sustainability, organic farming, energy efficiency, nutrient management, agroforestry, sustainable communities, research, livestock and crop diversity, and weed and pest management.
- Money for farmers is available in the form of loans and grants funding is procured for individual programs. These programs are not always available and submission dates must be strictly adhered to.
- Establish a good credit history that shows prompt repayment of loans.
- Develop a business plan and present the bank with hard data about the type of farm you will run, production projections, and your personal experience.
- Apply for the loan as far in advance of time you need the money as possible in order to allow the bank to fully evaluate the situation.
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