Adapted with permission from the USDA Farm Service Agency
The Farm Service Agency’s (FSA) microloan program was developed to serve the unique lending needs of small to mid-sized family farms. Microloans offer flexible access to credit for alternative farms such as Community Supported Agriculture (CSA), niche market producers and other non-traditional farms.
There are two types of loans available through the FSA’s microloan program: Farm Operating Loans and Farm Ownership Loans. The authorized uses of Operating and Ownership Microloans are the same as the authorized uses for the FSA Operating Loan Program and the FSA Ownership Loan Program, respectively. FSA Operating microloan uses include but are not limited to: start-up expenses, annual expenses, marketing and distribution expenses and other additional expenses required for farm operation. FSA Ownership microloan uses include but are not limited to: purchasing a farm or farm land, enlarging an existing farm, constructing or improving farm buildings, implementing soil and water conservation practices and more.
The microloan application process is simple, with requirements for managerial experience and loan security being modified to accommodate veterans, small or niche farming operations and beginning farmers. Applicants must have at least three years of farming experience in the last ten years. However, managing a small business, military leadership (any officer or E5 or above) or gaining post-secondary education in an ag-related field can be substituted for one of the three years.
Operating and Ownership microloans can be obtained for up to $50,000, with the repayment structure varying based on loan type. Interest rates will match the regular FSA loan rates in effect.
Application forms for an FSA microloan can be obtained at your local FSA office or can be downloaded from www.fsa.usda.gov/microloans. Completed forms should be submitted to your local FSA office.
More information about FSA’s microloan program can be found at: http://www.fsa.usda.gov/programs-and-services/farm-loan-programs/microloans/index.