Additional Farm Loan Funding Available09/06/2016
The U.S. Department of Agriculture (USDA) Farm Service Agency (FSA) Administrator Val Dolcini announced that additional funding will be made available to assist more than 1,900 approved applicants who are awaiting farm operating loans. The funds, which were reprogrammed by FSA with the approval of Congress, will leverage up to $185 million in additional lending for direct and guaranteed farm operation loans and will allow the agency to address up to 30 percent of its projected shortfall of funds until the next federal fiscal year resumes on Oct. 1.
“Some of our farming and ranching customers are experiencing challenges due to market conditions and have been on a wait list for up to 60 days, so this will help those applicants whose paperwork has been pending the longest period of time to obtain credit or restructure loans as needed,” said Dolcini. “While the backlog in loan applications will grow between now and the end of the fiscal year, it is important for borrowers to continue to apply since we will process loans on a first-come-first-served basis based on the application date, once funding is replenished in fiscal year 2017.”
FSA loan funds have been in higher demand than in past years. As a result, funding for FSA’s farm operating loans has been unable to meet the demand for the remainder of this fiscal year, which ends Sept. 30, 2016. In fiscal year 2016, FSA has guaranteed loans to more than 6,400 customers for farm ownership and operating purposes.
USDA also reminded lenders and potential borrowers of the loan guarantee programs available from the Small Business Administration (SBA) that can be used for similar purposes as FSA guaranteed loans. Some lenders work with both FSA and SBA on loan guarantees and can switch between the programs. This ability to switch between programs means the SBA programs can provide a financing alternative for agricultural producers when their lender is unable to close an FSA guaranteed loan, such as when funds have expended for the fiscal year.
“SBA fully supports our small business owners in the agriculture industry. For this fiscal year, as of July, more than $629 million in SBA loans have been provided to this community. We encourage agricultural small business owners and their lenders to look at all SBA has to offer,” said SBA Associate Administrator for Capital Access, Ann Marie Mehlum.
“Although SBA has different rates, terms, fees, limits and percentages than FSA loans, they can provide an alternative for banks and other lenders that are working to provide farmers and ranchers with guaranteed loans,” said Dolcini. The following chart provides more details:
Lenders may still submit guaranteed loan applications to FSA at any time for review and approval subject to the availability of funding. Approved requests will be funded on a first-come-first-served basis when additional funds become available.
More information about SBA loan programs can be found at www.sba.gov/loans. To learn more about USDA farm loans, visit www.fsa.usda.gov/farmloans or contact a local USDA office. To find the nearest USDA office, visit http://offices.usda.gov.
Since 2009, USDA has worked to strengthen and support American agriculture, an industry that supports one in 11 American jobs, provides American consumers with more than 80 percent of the food we consume, ensures that Americans spend less of their paychecks at the grocery store than most people in other countries and supports markets for homegrown renewable energy and materials. USDA has also provided $5.6 billion in disaster relief to farmers and ranchers, expanded risk management tools with products like Whole Farm Revenue Protection and helped farm businesses grow with $36 billion in farm credit. The Department has engaged its resources to support a strong next generation of farmers and ranchers by improving access to land and capital, building new markets and market opportunities and extending new conservation opportunities. USDA has developed new markets for rural-made products, including more than 2,500 biobased products through USDA’s BioPreferred program, and invested $64 billion in infrastructure and community facilities to help improve the quality of life in rural America. For more information, visit www.usda.gov/results.