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Farm Operating Loans (Direct and Guaranteed)
The Farm Service Agency (FSA) offers farm operating loans to family farmers and ranchers to promote, build and sustain family farms in support of a thriving agricultural economy.
FSA provides guaranteed and direct loans. Under a guaranteed loan, a commercial lender makes and services the loan, and FSA guarantees it against loss up to a maximum of 95 percent of loan value. For those not yet meeting the qualifications for a loan guarantee from a commercial lender, FSA also makes available direct loans, which are serviced by FSA. FSA has the responsibility of providing credit counseling and supervision to its direct borrowers by making a thorough assessment of the farming operation.
The goal of FSA's farm loan programs is to graduate its borrowers to commercial credit. Once a farmer is able to obtain credit from the commercial lending sector, the agency's mission of providing temporary, supervised credit is complete.
Eligible applicants may obtain direct loans for up to a maximum indebtedness of $300,000 and a direct operating Microloan for up to a maximum indebtedness of $50,000. Maximum indebtedness for a guaranteed loan is $1,399,000 (amount adjusted annually for inflation). The repayment term may vary, but typically it will not exceed seven years for intermediate-term purposes. Annual operating loans are generally repaid within 12 months or when the commodities produced are sold. In general, loan funds may be used for normal operating expenses, machinery and equipment, minor real estate repairs or improvements, and refinancing debt.
General Program Requirements
To qualify for assistance, applicants must meet all loan eligibility requirements including:
- Be a family farmer;
- Have a satisfactory history of meeting credit obligations;
- For direct OL loans, be able to show sufficient farm managerial experience through education, on-the-job training, and/or general farm experience
- Be a citizen, non-citizen national or legal resident alien of the United States, including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and certain former Pacific Trust Territories
- Be unable to obtain credit elsewhere at reasonable rates and terms to meet actual needs;
- Possess legal capacity to incur loan obligations;
- Not be delinquent on a federal debt; and
- Not have caused FSA a loss by receiving debt forgiveness (certain exceptions apply); and
- Be the tenant-operator or owner-operator of a family farm after loan closing.
Eligible applicants may obtain direct loans for up to a maximum indebtedness of $300,000, and guaranteed loans for up to a maximum indebtedness of $1,392,000 (amount adjusted annually for inflation).
The repayment term may vary, but typically it will not exceed 7 years for intermediate-term purposes.
Annual operating loans are generally repaid within 12 months or when the commodities produced are sold. In general, loan funds may be used for normal operating expenses, machinery and equipment, real estate repairs, and refinancing debt.
Your Next StepsThe following information will lead you to the next steps to apply for this benefit.
To apply for a direct operating loan, applicants must submit an application form (FSA-2001, "Request for Direct Loan Assistance") and all other required documentation to their local USDA Service Center or FSA County Office. Please follow guidance on “How to Complete an FSA Loan Application” found on the FSA Fact Sheet. Forms can be located on FSA's Farm Loan Programs Direct Loan Application Forms and Instructions page.
To apply for a guaranteed loan, visit your lender who will arrange for the guarantee.