Are you or is someone you know trying to get into farming but can’t get the loan you need? Here’s some exciting news, then!
From the original post:
Microloan Program Details
These new microloans will be funded through FSA’s existing Direct Operating Loan program, and will have a maximum loan amount of $35,000, which is much lower than the $300,000 loan cap for regular FSA farm operating loans. These smaller loans are intended to cover smaller purchases, such as seeds, animals, small equipment, or other investments that young and other beginning farmers require to finance their operations.
Farmers will be required to secure these smaller microloans with collateral in the form of farm property worth at least 100 percent of the loan amount. Similar to other FSA loans, a third party pledge of security or co-signer will be accepted to meet these security requirements when necessary.
The new microloan program will feature a simplified and streamlined application process, and will require less paperwork for farmers to fill out and appropriately reflects the smaller loan amount. The microloan application will be available online, which was a recommendation included in NSAC’s comments on the initial rule published last summer. Although FSA agrees that an online application process would be an efficient alternative to the present loan application process, microloan applications cannot at the current time be completed and submitted electronically so therefore must be filed in person at the local FSA office.
In order to be eligible for the new microloan program, a farmer must have sufficient prior experience working on a farm, but borrowers will be given additional flexibility in meeting FSA’s farm management experience requirement. This includes small business experience, participating in a self-directed apprenticeship, or having prior involvement with an agricultural organization, such as 4-H, FFA, farm incubator programs, and community-based farm training organizations. FSA intends to provide additional guidance on how migrant workers can meet the management requirement in order to take into account their prior farm experience.
FSA will not require an itemized cash flow budget for microloan applicants, a previous requirement that has made it difficult for diversified fruit and vegetable growers and community-supported agriculture farmers to participate in FSA lending programs. FSA’s new flexibility in matching production and income loan-making measurement tools to specific types of production and marketing is to be commended.