5 Types of Agriculture Loans

Agriculture loans are commonly supplied by the Farm Service Agency (FSA) of the United States Department of Agriculture (USDA). You may be able to find state or local loans as well, but the federal programs are often the most well-funded and easy to secure. Consider these programs if you are looking for an agriculture loan.

Farm Storage Facilities Loans

Farm Storage Facility Loans (FSFL) can help you afford the cost to build an on-farm storage facility for your crop and products. To qualify, the commodities you are storing must fall into the categories of: corn, oats, wheat, barley, rice, soybeans, peanuts, oilseeds, lentils, peas, hay, biomass, fruits, vegetables or grain. If you qualify, you can obtain up to $500,000 in direct financing from the federal government.

Farm Operating Loans

Operating loans assist farmers in day-to-day needs or expansion requirements. They come in both direct and indirect options. An indirect loan is provided by a private lender but may be guaranteed by the FSA. This makes the loan more affordable. A guaranteed, indirect loan may be issued in an amount as large as $1,112,000, with a guarantee up to 95 percent. Direct loans may also be issued to credit worthy individuals who do not qualify for private loans due to other circumstances. These loans may be as large as $300,000. 

Farm Ownership Loans

Like operating loans, ownership loans provided by the FSA come in both guaranteed and direct loan form. The limits are the same as those limits provided by the operating loan program. This money must go directly toward the purchase of land, livestock, crops or machinery needed to assist in acquiring ownership of a farm meant for commercial production. In addition to credit requirements, the farm owner must have experience in the farming industry to promise successful operation of the new business.

Fisheries Finance Program

This program is designed for specific projects in fisheries that qualify under the direction of Congress. A qualified program is eligible for up to 80 percent financing through a direct loan program. This loan program is designed to refinance a private debt on a fishing vessel or to provide for maintenance and repairs on an existing vessel. Qualified projects do not include complete construction of a new fishing vessel or fishery, however. In order to qualify, the fishery must meet environmental and government regulations. The business owner must also be free of delinquent federal debt and be in good financial standing. This program is not designed to refinance a loan in delinquency or default.

Farm Labor Housing 

This program provides loans and grants through the US Department of Housing and Rural Development's Rural Housing initiative. The program provides capital to build or replace housing structures for rural farm workers. The program is meant to make the housing facilities more livable, and it may include the replacement or repair of furnishings inside the housing structure. Further, this loan or grant can extend to a wide range of farming projects including rare projects like oyster farming or fisheries.

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