Posts Tagged: USDA
USDA Announces Streamlined Guaranteed Loans and Additional Lender Category for Small-Scale Operators
USDA recently announced the availability of a streamlined version of USDA guaranteed loans, which are tailored for smaller scale farms and urban producers. The program, called EZ Guarantee Loans, uses a simplified application process to help beginning, small, underserved and family farmers and ranchers apply for loans of up to $100,000 from USDA-approved lenders to purchase farmland or finance agricultural operations.
These EZ Guarantee Loans will help beginning and underserved farmers obtain the capital they need to get their operations off the ground, and they can also be helpful to those who have been farming for some time but need extra help to expand or modernize their operations. USDA's Farm Service Agency has offices in nearly every county in the country.
USDA also unveiled a new category of lenders that will join traditional lenders, such as banks and credit unions, in offering USDA EZ Guarantee Loans. Microlenders, which include Community Development Financial Institutions and Rural Rehabilitation Corporations, will be able to offer their customers up to $50,000 of EZ Guaranteed Loans, helping to reach urban areas and underserved producers. Banks, credit unions and other traditional USDA-approved lenders, can offer customers up to $100,000 to help with agricultural operation costs.
EZ Guarantee Loans offer low interest rates and terms up to seven years for financing operating expenses and 40 years for financing the purchase of farm real estate. USDA-approved lenders can issue these loans with the Farm Service Agency (FSA) guaranteeing the loan up to 95 percent.
California Farmlink is one of the USDA-approved lenders for some of these loans: http://www.californiafarmlink.org/farm-financing
FSA also offers loans of up to $5,000 to young farmers and ranchers though the Youth Loan Program. Loans are made to eligible youth to finance agricultural projects, with almost 9,000 young people now participating.
More information about the available types of FSA farm loans can be found at www.fsa.usda.gov/farmloans or by contacting your local FSA office. To find your nearest office location, visit http://offices.usda.gov.
USDA launched the new year by announcing an exciting new program that it has developed: microloans designed to help small and family farm operations, and socially disadvantaged farmers obtain loans under $35,000. The microloan program also has a more simplified application process in comparison to traditional farm loans.
Producers can apply for a maximum of $35,000 to pay for start-up expenses such as season-extending hoop houses, tools, irrigation systems, delivery vehicles, as well as operating costs such as seed, fertilizer, utilities, land rental, marketing, and distribution expenses. The current interest rate is 1.25%. Repayment terms vary, but do not exceed seven years. Annual operating loans need to be repaid within 12 months, or when the crops produced are sold.
The Farm Service Agency (FSA) recognizes that some microloan applicants will not have traditional farm experience. FSA will consider an applicant’s small business experience, as well as any self-guided farm apprenticeship, as possibly fulfilling the farm management experience requirement. More details about the Microloan program are included in the Fact Sheet. Producers interested in applying for a microloan may contact their local Farm Service Agency office./span>