Farmers have access to various great loans that can help them expand their farms, keep them running smoothly, or even help them get back on their feet when hard times strike, including Direct Farm Loans and Farm Ownership Loans through the United States Department of Agriculture and installment loans.
During uncertain times, small farmers may find themselves in need of financial assistance. Thankfully, there are so many great options available to them.
A farmer's loan is used to purchase, expand, or care for a farm or ranch.
During uncertain times, farmers may struggle to make ends meet or don't have the funds readily available to expand and adequately take care of their ranch.
While there are many options available for farmers, they're not one-size-fits-all. While some loans are great for new, small farmers, some are geared towards helping farms scale their farms, while microloans are offered for family farms.
One of the best solutions for any farmer who needs a loan is an installment loan.
So, which loan is best for you, and how can you use it?
Since farming is one of the most important industries in the U.S., many great loans are offered through the United States Department of Agriculture.
The two main categories most of these loans fall under are:
Commercial lenders, such as the Farm Credit System, banks, credit unions, and other non-traditional lenders, are serviced and make these loans.
The Farming Service Agency backs the lender's loan against a loss of up to 95% and oversees approving loan guarantees and keeping an eye on what the lender is doing.
The Farming Service Agency services direct loans by using federal government funds and issuing them to farmers. They offer credit counseling and supervision to help steer borrowers in the right direction and help applicants figure out if their real estate, machinery, facilities, goals, financial management, production management, and equipment are good enough.
Now that you know a little about the direct loans program, it is time to discuss other types of direct loans.
Farmers can use operating loans to buy the animals and tools they need to keep their farms running well. Furthermore, farmers can also use these loans to pay for small repairs to their land and any annual operating costs.
Operating loans are an excellent option for small farmers who need them to make meaningful updates to keep their farms running smoothly.
This type of loan is suitable for up to $400,000, with a term of up to 25 years.
A farm ownership loan allows farmers to purchase land for a farm or enlarge an existing farm or ranch. It can also help farmers fix up or build a building on their farm or ranch, pay for water and soil protection and conservation, and even cover closing costs.
Farm ownership loans are outstanding for farmers who need more money to expand their farm or buy land to start one. It's also great for farmers who wish to add conservation practices to their farm or ranch. But because of these higher costs, many farmers don't have the money available when needed.
This loan is good for up to $600,000 with a term of up to 40 years.
Emergency loans offered through the USDA are given to farmers who have suffered a qualifying loss caused by natural disasters.
If a natural disaster causes damage to a farm or ranch, the farmer may be able to get an emergency loan that can be used to:
Emergency loans for farmers cover 100% of the actual or physical losses, or $500,000. So, it will usually be whichever one is the lowest.
The USDA uses microloans as direct farm ownership and operating loans. They have a shortened application process with reduced paperwork designed to meet the needs of smaller farms or ranches that may be considered non-traditional or have a niche-type operation.
The maximum loan amount for this loan is $50,000, with a term of up to 25 years.
Another option for farmers is guaranteed loans. A guaranteed loan is a type of loan that a third-party guarantor, such as a government agency or a private organization back. This guarantor agrees to repay the loan if the borrower cannot make the payments or defaults on the loan.
The guarantee provides lenders with an added security level, allowing them to offer more favorable terms, such as lower interest rates and longer repayment periods.
Conservation loans let farmers do things to protect and conserve water and soil, which might be part of an approved conservation plan.
These loans are great but are hard to come by as the rules are strict.
The maximum loan amount for this is adjusted annually for inflation. The term of this loan depends on the life of the security but should not exceed 30 years.
These loans have a shortened application and process and a reduced amount of paperwork. They are designed to meet the needs of small farmers that may be non-traditional or fit a niche-type operation.
EZ Guarantee Loans are offered through the USDA and are an excellent resource for small farms that want simple loans.
The maximum loan amount for this loan is $100,000, with a term of up to 40 years.
A farm ownership loan allows farmers to purchase land for a farm or enlarge an existing farm or ranch. It can also help farmers fix up or build a building on their farm or ranch, pay for water and soil protection and conservation, and even cover closing costs.
Farm ownership loans are great for farmers who need more money to expand their farm or buy land to start one. It's also great for farmers who wish to add conservation practices to their farm or ranch. But unfortunately, because these are higher costs, many farmers don't have the money readily accessible when needed.
This loan is good for up to $600,000, with a term of up to 40 years.
Each loan through the USDA has different requirements you must meet to receive them. You must also meet additional loan requirements for both direct and guaranteed loans.
Although each loan offered through the United States Department of Agriculture has different requirements that must be met to obtain them, here are some of the general eligibility requirements for Direct Loans:
Here are a couple of loan-specific requirements you must meet for certain types of loans offered through the USDA.
Beginning Farmer or Rancher Targeted Funds:
Farm Ownership Loans:
For Down Payment Loans:
For Emergency Loans:
The general eligibility requirements for Guaranteed Loans are primarily the same as the general requirements for a Direct Loan, with this addition:
A couple of other loans are offered through the United States Department of Agriculture. Let's check out the list.
The FSA offers operating loans of up to $5,000 for youth ages 10 to 20 to finance income-producing, agriculture-related projects.
Youth in FFA, 4-H clubs, agriculture-related groups, or tribal youth organizations must do these projects.
These projects must be organized, supervised by work programs, and overseen by an organization advisor. Additionally, it must produce sufficient income to repay the loan.
These loans can be used to:
This loan program is for farmers who need to build or upgrade their storage and handling facilities. The maximum loan amount for this is $500,000, but several other rules and regulations exist for this loan program.
This loan program allows farmers to be helped with upgrading or construction costs for facilities that store raw or refined sugar.
This loan is used when the item used as collateral doesn't meet the U.S. grading standard quality requirement.
Does all the above feel like a lot?
Thankfully, farmers can obtain loans in other ways without dealing with the government's fickle eligibility requirements.
Simple Fast Loans offers installment loans that farmers can easily acquire to help them through troubled times.
Sometimes you need cash, and you need it fast. Since the process of obtaining a farmer's loan can be complicated and lengthy, Simple Fast Loans offers great installment loans that can help you get back on your feet.
Whether your production costs skyrocketed, you require more funds to use for upkeep, there are so many things you can use an installment for, and they won't be regulated by the government, giving you more room to do as you please with your loan.
Farmers have access to various great financial assistance programs to ensure they can grow and thrive. A backbone of the United States, farmers help make everyone else's lives function.
Although so many wonderful government-backed loans are available, many come with strict stipulations you may not want to deal with and can take a long time to be officially approved.
If you require a loan, fast, Simple Fast Loans can help you quickly get the money you need with an installment loan.
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