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!
Microloans now available for young and beginning farmers from the National Sustainable Agriculture Coalition.
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.
Read the full story here.