Microloan Programs, USA

The focus of Microloans is on the financing needs of small, beginning farmer, niche and non-traditional farm operations, such as truck farms, farms participating in direct marketing and sales such as farmers’ markets, CSA’s (Community Supported Agriculture), restaurants and grocery stores, or those using hydroponic, aquaponic, organic and vertical growing methods.

Frequently Asked Questions

Microloan Purposes

Direct Farm Ownership Microloans

  • Make a down payment on a farm
  • Build, Repair, or Improve farm buildings, service buildings, farm dwelling
  • Soil and Water Conservation Projects
  • May be used as a Downpayment Farm Ownership Loan
  • May be used in Joint Financing

Direct Farm Operating Microloans

  • Essential tools
  • Fencing and trellising
  • Hoop houses
  • Bees and bee equipment
  • Milking and pasteurization equipment
  • Maple sugar shack and processing equipment
  • Livestock, seed, fertilizer, utilities, land rents, family living expenses, and other materials essential to the operation
  • Irrigation
  • GAP (Good Agricultural Practices), GHP (Good Handling Practices), and Organic certification costs
  • Marketing and distribution costs, including those associated with selling through Farmers’ Markets and Community Supported Agriculture operations
  • Pay for qualifying OSHA compliance standards (Federal or State)

Microloan versus FSA’s “regular” loan

Direct Farm Ownership Microloans

  • No appraisal needed
  • Verification of non-farm income unnecessary unless required for repayment
  • Successful repayment of an FSA Youth loan may be used towards the required 3 years of management experience

Direct Farm Operating Microloans

  • The Microloan program allows for situations where production yield history or reporting is impractical, not relevant to the proposal submitted, or is not available.
  • Modified farm managerial experience requirements accommodate smaller farm operations, beginning farmers, and those with no farm management experience. Small business experience plus any farm experience, along with a self-guided apprenticeship, is a way to meet the farm management requirement.
  • Rural Youth loan recipients with a successful repayment history, or youth who have participated in an agriculture-related organization, can meet the modified managerial ability requirements with those experiences.

Loan Limitations

There is no minimum loan amount. The maximum loan amount for either Microloan is $50,000. The $50,000 limit includes any possible outstanding FSA Direct Operating or Farm Ownership unpaid principal loan balances. A loan applicant may have a Guaranteed Operating loan, Farm Ownership loan or Emergency loan and still qualify for a Microloan.

Website link:  https://www.fsa.usda.gov/programs-and-services/farm-loan-programs/microloans/index

See also

Guaranteed Farm Loans, USA

Farm Ownership Loans, USA

Farm Operating Loans, USA

Loan Servicing, USA

Emergency Farm Loans, USA

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