Skip repetitive navigation links.
United States Department of AgricultureFarm Services AgencyFarm Service Agency
Go to FSA Home Go to FSA Home Go to About FSA Go to State Offices Go to Newsroom Go to Online Services Go to Forms Go to Help Go to Contact Us Go to Spanish Languages
Search FSA
Go To Search Tips
Browse by Audience
Agribusiness
Cooperatives
Congress
FSA Employees
Landowners
Conservationists
Lenders and Banks
Media
Parents and Caregivers
Producers
Researchers
Academic Community
Browse by Subject
Go to Aerial Photography
Go to ARC/PLC Program
Go to Commodity Operations
Go to Conservation Programs
Go to Dairy Margin Protection Program
Go to Direct and Counter-Cyclical Program/ACRE
Go to Disaster Assistance Programs
Go to Economic and Policy Analysis
Go to Energy Programs
Go to Environmental and Cultural Resource Compliance
Go to Farm Loan Programs
Go to Financial Management Information
Go to Laws and Regulations
Go to Modernize and Innovate the Delivery of Agricultural Systems
Go to Outreach and Education
Go to Payment Eligibility
Go to Price Support
Go to Tobacco
Newsroom

Fact Sheets


 
January 2013

 
ARCHIVED

 
Microloans

 
Overview

 
The Farm Service Agency (FSA) developed the Microloan (ML) program to better serve the unique financial operating needs of beginning, niche and the smallest of family farm operations by modifying its Operating Loan (OL) application, eligibility and security requirements. The program will offer more flexible access to credit and will serve as an attractive loan alternative for smaller farming operations like specialty crop producers and operators of community supported agriculture (CSA). These smaller farms, including non-traditional farm operations, often face limited financing options.
Use of Microloans

 
Microloans can be used for all approved operating expenses as authorized by the FSA Operating Loan Program, including but not limited to:
  • Initial start-up expenses;
  • Annual expenses such as seed, fertilizer, utilities, land rents;
  • Marketing and distribution expenses;
  • Family living expenses;
  • Purchase of livestock, equipment, and other materials essential to farm operations;
  • Minor farm improvements such as wells and coolers.
  • Hoop houses to extend the growing season;
  • Essential tools;
  • Irrigation;
  • Delivery vehicles.

 
Simplified Application Process

 
The application process for microloans will be simpler, requiring less paperwork to fill out, to coincide with the smaller loan amount that will be associated with microloans. Requirements for managerial experience and loan security have been modified to accommodate smaller farm operations, beginning farmers and those with no farm management experience.

 
FSA understands that there will be applicants for the ML program who want to farm but do not have traditional farm experience or have not been raised on a farm or within a rural community with agriculture-affiliated organizations. ML program applicants will need to have some farm experience; however, FSA will consider an applicant's small business experience as well as any experience with a self-guided apprenticeship as a means to meet the farm management requirement. This will assist applicants who have limited farm skills by providing them with an opportunity to gain farm management experience while working with a mentor during the first production and marketing cycle.

 
Security Requirements

 
For annual operating purposes, microloans must be secured by a first lien on a farm property or agricultural products having a security value of at least 100 percent of the microloan amount, and up to 150 percent, when available.

 
Microloans made for purposes other than annual operating expenses must be secured by a first lien on a farm property or agricultural products purchased with loan funds and having a security value of at least 100 percent of the microloan amount.

 
Rates and Terms

 
Eligible applicants may obtain a microloan for up to $35,000. The repayment term may vary and will not exceed seven years. Annual operating loans are repaid within 12 months or when the agricultural commodities produced are sold. Interest rates are based on the regular OL rates that are in effect at the time of the microloan approval or microloan closing, whichever is less.

 
More Information and Eligibility Criteria
Additional information on the FSA microloan program may be obtained at local FSA offices or through the FSA website at http://www.fsa.usda.gov.

 

 
The U.S. Department of Agriculture (USDA) prohibits discrimination in all of its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, political beliefs, genetic information, reprisal, or because all or part of an individual's income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).

 
To file a complaint of discrimination, write to USDA, Assistant Secretary for Civil Rights, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue, S.W., Stop 9410, Washington, DC 20250-9410, or call toll-free at (866) 632-9992 (English) or (800) 877-8339 (TDD) or (866) 377-8642 (English Federal-relay) or (800) 845-6136 (Spanish Federal-relay).

 
USDA is an equal opportunity provider and employer.

 

FSA Home | USDA.gov | Common Questions | Site Map | Policies and Links
FOIA | Accessibility Statement | Privacy Policy | Nondiscrimination Statement | Information Quality | USA.gov | White House