Farm Service Agency loans for beginning farmers!
Five Myths busted at recent Farminar on beginning farmer financing conducted by Practical Farmers of Iowa.
5. Beginning farmers can’t get financing unless they grow corn and soybeans.
Farm Service Agency loan officers are public servants and work with all kinds of farmers (fruits, vegetables, nuts, livestock [meat, fur, eggs, dairy], aquaponic fish farms, and much more!)
4. You have to own land to get an operating loan to farm from the Farm Service Agency.
Not at all, only if you want to make improvements on a building or build a new structure, do you need to own the land it sits on. For an operating loan, you can get financing to buy machines, implements, or breeding livestock without owning any land at all.
3. Farm Service Agency doesn’t want to help beginning farmers unless they are a safe investment.
The Farm Service Agency’s beginning farmer loan programs are created to be a place for beginning farmer to turn when other lenders turn them down. Their goal is to help beginning farmers succeed to the point where commercial/traditional lenders (banks) are knocking on their door asking to lend them money. Now, they don’t want to lend money to folks who don’t have a plan to pay it back, so in that respect, they will ask you lots of questions to make sure you are ready for the loan.
2. Interest rates and terms are not favorable enough for beginning farmers to succeed.
WRONG – October 2011 interest rate for beginning farmer operating loan is 1.75% and can be as long as 7 years for tractors and other machinery. Real estate loans in October 2011 were 4.25% and are up to 100% financing for 40 years.
1. You need to farm for three years before you can get a loan with the Farm Service Agency.
WRONG – Only for real estate loans do you need to have three years of management experience in order to qualify. For operating loans, you need to demonstrate your competency to repay the loan, but you are not turned away if you have less than three years management experience.
View the complete farminar recorded live Nov-1, 2011
Join us each Tuesday November 8, 2011 through March 6, 2012 for live Farminar broadcasts of 90 minute online seminars. For more information, go to practicalfarmers.org/farminar