Agriculture Secretary Tom
Vilsack unveiled a new microloan program today that will expand access to
credit for small farmers and ranchers and beginning and socially disadvantaged
producers.
The microloan application
process is simpler and requires less paperwork than traditional operating
loans. Additionally, the requirement for managerial experience and loan
security has been modified to ensure that small family operations and beginning
farmers and ranchers can obtain the credit needed to start and continue an
agricultural operation. This loan program will also be useful to specialty crop
producers and operators of community supported agriculture (CSA).
Eligible applicants can apply
for a maximum amount of $35,000 to pay 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 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.
Small farmers often rely on
credit cards or personal loans, which carry high interest rates and have less
flexible payment schedules, to finance their operations. The microloan program
will expand access to credit and provide a simple and flexible loan process for
small operators.
The current interest rate for
Microloans is 1.25 percent.
In addition to microloans, FSA
offers several farm loan programs that provide funding to purchase land,
livestock, equipment, feed, seed, and supplies, or can be used to construct
buildings or make farm improvements.
Producers interested
in applying for a microloan or other FSA farm loan program should contact their
local Farm Service Agency office
