USDA Farm Service Agency (FSA) Acting State Executive Director Glenn Schafer reminds Minnesota agricultural producers or those who wish to become involved in production agriculture of the new microloan program available through FSA.
The microloan program provides a more simplified application process compared to traditional farm loans for small, beginning, or socially disadvantaged farmers seeking loans of $35,000 or less.
“The new microloan program was announced by Secretary Vilsack on January 15, 2013, and FSA has already received applications and approved loans in Minnesota.” Schafer said. “This is an exciting new type of loan program that may create many new opportunities for people interested in production agriculture.”
Producers can apply for a maximum of $35,000 through an easier application process. Loan funds can be used for a variety of farm operating purposes, including paying for initial start-up expenses such as hoop houses to extend the growing season, essential tools, irrigation, delivery vehicles, and annual expenses such as seed, fertilizer, utilities, land rents, marketing, and distribution expenses. As their financing needs increase, applicants can apply for an operating loan up to the maximum amount of $300,000 or obtain financing from a commercial lender under FSA’s Guaranteed Loan Program.
USDA-FSA farm loans can be used to purchase land, livestock, equipment, feed, seed, and supplies, or be to construct buildings or make farm improvements. Many small producers rely on alternative credit sources that have higher interest rates and less flexible repayment schedules than what is available with FSA loan programs.
Producers interested in applying for a microloan may contact their local Farm Service Agency office.