Provides low-interest loans for land and building acquisition and construction,
machinery and equipment purchases, and working capital up to $200,000 or 40% of
the total eligible project cost, whichever is less.
Next Generation Farmer Loan Program
The Next Generation Farmer Loan Program (NGFLP) encourages lenders to finance beginning
farmers by allocating a portion of the Commonwealth’s private activity bond volume
cap to first-time farmer projects. The loan is made at the lender’s credit
standards and other terms and conditions. However, because the program exempts
the lender from owing Federal, State, or county income taxes on the interest it
would earn from the loan, the lender can offer a lower interest rate than it usually
The CDC/504 loan program, part of the federal Small Business Administration, is
a long-term financing tool for economic development within a community. The 504
Program provides growing businesses with long-term, fixed-rate financing for major
fixed assets, such as land and buildings. A Certified Development Company is a nonprofit
corporation set up to contribute to the economic development of its community. CDCs
work with the SBA and private-sector lenders to provide financing to small businesses.
USDA Farm Service Agency Direct Loans (Ownership Loans)
"Direct" farm loans are made by FSA with Government funds. The FSA also services
these loans and provides their Direct loan customers with supervision and credit
counseling so they have a better chance for success. Farm Ownership, Operating,
Emergency and Youth loans are the main types of loans available under the Direct
program. Direct loan funds are also set aside each year for loans to minority
applicants and beginning farmers
FSA guaranteed loans provide lenders (e.g., banks, Farm Credit System institutions,
credit unions) with a guarantee of up to 95 percent of the loss of principal and
interest on a loan. Farmers and ranchers apply to an agricultural lender, which
then arranges for the guarantee. The FSA guarantee permits lenders to make agricultural
credit available to farmers who do not meet the lender's normal underwriting criteria.
FSA guaranteed loans are for both Farm Ownership and Operating purposes. Like the
Direct Loan Program, a percentage of Guaranteed Loan funds is targeted to beginning
farmers and ranchers and minority applicants.