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First Industries loan guarantees provide private lenders with a risk management tool, and agricultural borrowers access to private credit sources at potentially lower-risk rates and terms. Once the lender and the loan are approved by CFA, lenders receive a certificate from CFA promising to repay the loan at 50 cents on the dollar if it turns out that the borrower cannot repay. The total pay-off cannot exceed $2.5 million.
"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 |