The Farm Service Agency (FSA) offers farm operating loans, both direct and guaranteed, to family farmers and ranchers. These loans can help those who are temporarily unable to get private or commercial credit on their own at reasonable rates and terms.
You may use Operating Loans to:
- Buy items such as livestock and feed, farm equipment, fuel, farm chemicals, and insurance.
- Pay family living expenses and other operating costs.
- Make minor improvements or repairs to buildings and fencing.
- Refinance certain farm-related debt, except real estate.
The maximum loan amount for a Direct Operating Loan is $400,000. No down payment is required; other terms and conditions apply.
Under an FSA guaranteed loan, you apply to an agricultural lender. The lender makes and services the loan, and FSA guarantees the loan against losses up to a maximum of 95%. The FSA guarantee permits lenders to offer credit to farmers who don't meet the normal lending criteria; certain terms and conditions apply.
The maximum loan amount for a Guaranteed Operating Loan is $1,776,000.
To meet the needs of smaller, non-traditional, and niche-type operations, FSA also offers the following:
- Direct Operating Microloans (maximum of $50,000 for each of Direct Operating and Direct Farm Ownership Loans). These are Direct Operating Loans with a shortened application process and reduced paperwork.
- Guarantees for EZ Guarantee loans (maximum is $100,000). These are for loans from private lenders.
FSA's mission is not just to provide credit, it's to provide supervised credit. This means FSA works with you to identify strengths and opportunities for improvement in your farming operation. You can learn better business and financial planning that may help guide you toward success.
The goal of FSA's Farm Loan Program is to help you get to commercial credit in the future. Once you, as a farmer or rancher, are able to get credit from a commercial lender on your own, the Agency's farm loan mission is complete.
