New Microloans expand small farm finance options
SPRINGFIELD — New and beginning farmers and ranchers in Illinois have an agricultural Microloan credit option to consider. As of Jan. 15, the U.S. Department of Agriculture’s Farm Service Agency (FSA) will offer its customers a Microloan designed to help farmers and ranchers with credit needs of $35,000 or less. The loan features a streamlined application and a simplified qualifications process built to fit the needs of new and smaller producers.
“This innovative offering will be more customer-friendly than our larger, more traditional loan programs,” said USDA Farm Service Agency (FSA) State Executive Director Scherrie Giamanco. “Farmers and ranchers seeking a smaller loan for start-up or operational needs now have a great new tool to consider.”
As an example, for those selling at Farmers’ Market or through community-supported agriculture operations, a Microloan might serve their needs perfectly,
“And the reduced paperwork associated with the new Microloan will help expedite the process for everyone,” Giamanco continued.
In 2012, the Illinois Farm Service Agency provided a total of $190,162,000 in farm loan assistance to agricultural producers of all size operations. Of the 859 loans made, 508 were made for farm ownership purposes, and 350 were made for farm operating purposes, with one emergency loan issued. Of the 859 loans made, more than half (483) were made to beginning and socially disadvantage farmer applicants for $75,000,000.
The current interest rate for operating loans including the Microloan operating loan is 1.25 percent, and they can be used for needed capital items as well as operating expenses, Giamanco said.
Producers in Illinois can contact their local county FSA office for details and to determine if they qualify for a Microloan. The Microloan term can be up to seven years.