Direct Farm Operating Microloans

Direct Farm Ownership Microloans are meant to fund:
essential tools;
fencing and trellising;
hoop houses;
bees and bee equipment;
milking and pasteurization equipment;
maple sugar shack and processing equipment;
livestock, seed, fertilizer, utilities, land rents, family living expenses, and other materials essential to the operation;
irrigation;
GAP (Good Agricultural Practices), GHP (Good Handling Practices), and Organic certification costs;
marketing and distribution costs, including those associated with selling through Farmers’ Markets and Community Supported Agriculture operations; and
payments for qualifying OSHA compliance standards (Federal or State).

The Microloan program allows for situations where production yield history or reporting is impractical, not relevant to the proposal submitted, or is not available.

Modified farm managerial experience requirements accommodate smaller farm operations, beginning farmers, and those with no farm management experience. Small business experience plus any farm experience, along with a self-guided apprenticeship, is a way to meet the farm management requirement.

Rural Youth loan recipients with a successful repayment history, or youth who have participated in an agriculture-related organization, can meet the modified managerial ability requirements with those experiences.

Eligibility

Traditional and non-traditional family farms and ranches may be eligible for Microloan financing.

General eligibility requirements include:
must not have Federal or State conviction(s) for planting, cultivating, growing, producing; harvesting, storing, trafficking, or possession of controlled substances;
have the legal capacity to incur the loan obligation;
be able to show an acceptable credit history;
is a citizen, non-citizen national or legal resident alien of the United States;
have no previous debt forgiveness by the Agency, including a guarantee loan loss payment;
be unable to obtain sufficient credit elsewhere, with or without an FSA loan guarantee;
not be delinquent on any Federal debt, other than IRS tax debt, at the time of loan closing; and
not be ineligible due to disqualification resulting from Federal Crop Insurance violation.

Microloan applicants still need to have some farm experience; however, small business experience and agricultural internships and apprenticeship programs, even those that are self-guided, count toward meeting the farm management requirement. Microloan applicants with minimal farm experience also have the option of working with a mentor for guidance during the first production and marketing cycle. It is not necessary for a Microloan applicant to have produced farm income to meet the requirements for managerial experience.

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