How to Get Farmer Loans

Whether you're new to farming or established in the field, a farmer's loan from the U.S. Farm Service Agency (FSA) can help you achieve your goals. To apply for a loan, figure out the type of loan that best suits your needs. Then, provide the FSA with a business plan and various documents showing your financial history. If approved, you'll have funds to help move forward with your farming plans.

Part 1

Part 1 of 3:

Choosing the Type of Loan

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Make sure you meet basic requirements. Not everyone qualifies for farmer loans. Before you begin the process, be aware that you must:^{[1]XResearch source}
- Be a family farmer
- Have a good credit history
- Be a U.S. citizen or legal resident
- Be able to legally incur loan obligations
- Have no history of causing the FSA a loss due to a loan
- Have no delinquencies on federal debts
- Be the owner/operator of a farm
A direct operating loan is handed out if there is a specific item you want to purchase. If you're looking to buy something like livestock, farm equipment, fuel, and so on, your best option is to apply for a direct operating loan.^{[2]XResearch source}
A microloan is a smaller loan given out to independent farms. Farms of this type are usually just starting out and produce a niche service or specialty crop.^{[3]XResearch source}
If you've been in the farming business and are now looking to buy your own farm, direct farm ownership loans give money to help farmers obtain their own property. These can also be used to enlarge or add buildings to an existing farm or to adjust an existing farm's soil or water.^{[4]XResearch source}
5
Apply for a guaranteed loan to extend credit to others. If you're looking to grant the money from your loan to others, a guaranteed loan is your best route. This loan allows you to extend your funds to others who do not meet qualifications. Money given from this loan is meant to be used to finance or expand an existing farm.^{[5]XResearch source}
- For example, if you want your child to eventually take over your farm, you can get a guaranteed loan if they don't qualify for a loan. Your child will be able to use the funds from the loan to expand and manage your farm.
6
See if you qualify for any targeted loans. There are some specialty loans for specific groups. If you fit into a targeted group, try applying for one of these loans.^{[6]XResearch source}
- If you're a young farmer participating in things like 4-H and need to fund your education, you can apply for a Youth Loan.
- Women and minority farmers can apply for Women and Minority Farmers and Ranchers Loans.
- If you've been in business for less than 10 years, look into Beginning Farmers and Ranchers Loans.
- If you're Native American, ask about Native American Tribal Loans.
Floods, droughts, and other natural disasters can greatly set back a farm's finances. If your farm has been harmed by a disaster, you can apply for an emergency loan for help.^{[7]XResearch source}
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Part 2

Part 2 of 3:

Applying for Your Loan

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Fill out the basic loan request form. Applying for loans requires an extensive amount of paperwork. To start, fill out a form requesting a loan. This will specify the type of farm you're operating, the type of loan you're applying for, how you plan to use the loan, and other basic information.^{[8]XResearch source}
- Any forms you need for the process can be downloaded on the FSA website or picked up at a local FSA or USDA office.
2
Gather information about your financial history. When you're applying for a loan, the FSA will want to know a great deal about your financial history to ensure you're responsible with money. If you've been keeping quality records on your farm, you can find this information where you keep important documents. Provide the following documents with your application:^{[9]XResearch source}
- 3 years of financial history
- 3 years of production history
- A list of any other creditors
3
Provide details of your training as a farmer. The FSA will want to make sure you're a trained, professional farmer. Present them with any training certifications, college transcripts, or other documents proving you received professional training to become a farmer.^{[10]XResearch source}
- For example, if you have an associate degree in a field related to agriculture, this would be something to include.
Online or at an FSA or USDA office, you should find a form authorizing employers, financial institutions, and other entities to release sensitive information regarding your financial and employment history. The FSA will want to review this information to make sure you're a safe investment. Sign and date the form and provide any other information requested to authorize the release of this information.^{[11]XResearch source}
5
Seek assistance to write a business plan. A business plan overviews the goals of your farm, as well as your general operating practices. Unless you have extensive experience in business, or work with someone who does, it's highly recommended you seek assistance to draft your business plan.^{[12]XResearch source} Remember, a farm loan is a business loan and the lender wants to see a story in which their investment is successful. The business plan you present is likely the most important piece of your entire application.
- Small Business Counselors is a non-profit organization. Volunteers have experience managing and running a business and can help you write a business plan.
- The USDA has various subgroups, such as the Extension Risk Management Education Program, that may be able to help you with your business plan.
- If you have a friend or family member who runs a business, ask if they'll assist you with your plan.
6
Submit your application to a local FSA office or USDA service center. You can look up local centers online. Once you've found a center near you, gather your paperwork and submit it there. Make sure you've signed and dated in all the necessary places and have all the information you need to apply.^{[13]XResearch source}
- Some loans may allow you to submit materials online, which is often easier. Check the FSA website to see if materials for your loan can be submitted online.
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Part 3

Part 3 of 3:

Completing the Process

1
Meet with an FSA representative. Usually, someone will contact you about scheduling a meeting with an FSA representative to discuss your request.^{[14]XResearch source} You will have an opportunity to address any questions or concerns the FSA has regarding your loan to help them process the application.
- If someone else helped write your business plan, make sure you are intimately familiar with it before this meeting, as many of the questions are likely to revolve around your business plan.
- Not every loan requires a meeting with an FSA representative. This is more likely to occur when you're applying for a direct loan.
While times will vary, you will usually hear back on your loan within 60 days of submitting your application. During that time, the FSA will reach out to you if they're having any problems. For example, if documents are missing, an FSA representative may contact you to request these papers.^{[15]XResearch source}
3
Sign several documents to receive your funds. If your loan is approved, you will have to meet with an FSA representative to sign the paperwork. Review the paperwork carefully so you understand the terms of your loan and then sign in the required places.^{[16]XResearch source}
- It's a good idea to take the paperwork home for a night to review it. This ensures you completely understand the terms of the loan.
- If you're not used to reading legal documents, have a lawyer or accountant go over the information with you.
4
See if you can appeal if your loan is rejected. If your loan is rejected, you can ask to meet with an FSA representative to go over the reasons why and ask for an appeal. A mediator may be present at the meeting to help the conversation run smoothly. You can also submit an appeal request to the National Appeals Division found within the USDA.^{[17]XResearch source}
- You can find information on the precise means to request an appeal via the USDA website.
5
Work on improving your chances in the future. If you don't receive a loan, review the reasons why. There are many reasons your loan may have been denied. Work on improving your odds for a loan and then reapply in the future.
- Review the documents you submitted. Was your business plan as detailed as necessary? Did you provide all the requested financial information? A lack of detail can often cause a loan to be rejected.
- Next time, think about enlisting help from business professionals to make sure your application is as thorough as possible before applying for a loan.
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This advice is for farmers loans in the United States. If you're not a U.S. citizen, there may be loan programs specific to your country you should check out.
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