- Author: Shermain Hardesty
USDA launched the new year by announcing an exciting new program that it has developed: microloans designed to help small and family farm operations, and socially disadvantaged farmers obtain loans under $35,000. The microloan program also has a more simplified application process in comparison to traditional farm loans.
Producers can apply for a maximum of $35,000 to pay for start-up expenses such as season-extending hoop houses, tools, irrigation systems, delivery vehicles, as well as operating costs such as seed, fertilizer, utilities, land rental, marketing, and distribution expenses. The current interest rate is 1.25%. Repayment terms vary, but do not exceed seven years. Annual operating loans need to be repaid within 12 months, or when the crops produced are sold.
The Farm Service Agency (FSA) recognizes that some microloan applicants will not have traditional farm experience. FSA will consider an applicant’s small business experience, as well as any self-guided farm apprenticeship, as possibly fulfilling the farm management experience requirement. More details about the Microloan program are included in the Fact Sheet. Producers interested in applying for a microloan may contact their local Farm Service Agency office./span>