This article is dedicated to all those people who need extra money for expanding their farm business. If you are thinking about expanding your farm business you should ask yourself a whole lot of questions. 

This article will help you ease your loan process. 

What is the Farm Service Agency (FSA)?

FSA is a part of the government of the United States. It looks after the loans and other financial services given to the farmers in the state.

If you receive a loan from some bank, you will have to pay back that money to the bank, along with the interest. 

This loan can be used to expand your farming business. FSA can help in financial planning for farmers and ranchers

What is the process of the loan?

Applying for an FSA Loan is a long and tedious process.

  1. First of all, you should find out what type of loan do you need. 
  2. You must find out if you are eligible for the loan or not. 
  3. You will have to develop a business plan that will show how much money you need and how you are going to use that money. You should also describe, how you are going to pay back that sum. 
  4. Gather all the documents required for the process – financial statement, work history, lease agreements, and business records.
  5. Apply for the loan. 
  6. If your loan is declined, you need to consult an FSA officer. He will help you in this loan process. 
  7. They will send you a letter describing they are accepting or rejecting your loan process. 
  8. If FSA agrees to back you, your bank will provide you the loan
  9. Eureka! Start farming!


What kind of loan do you need?

There are various types of loans available for farmers. Before you apply for a loan, you should first decide what type of loan you need.

You must ask yourself, what will be the use of this loan money? “Direct” loans are granted by the FSA itself using the government’s money. “Guaranteed” loans will be provided by the bank on the assurance of the FSA.

 The reason you need money for            Type of loan you should go for

Construct building                                               Guaranteed Farm Ownership

Buy Land                                                                Direct Farm Ownership

Carry out some project                                        Guaranteed Farm Ownership

Buy a new farm (first time)                                Direct Farm Ownership

Guaranteed Farm                                                 Ownership

Buy livestock, poultry, seed, etc.                       Direct Operating

Carry out some projects                                      Guaranteed Operating

Recover from some natural disaster                 Direct Emergency

Eligibility for the loan

There are so many types of loans. Once you have decided on the type of loan you need, you should also check about its eligibility. You will receive the loan money only when you are eligible for the loan. 

  • Do you have enough knowledge in the field of farming?
  • How long have you been operating a farm?
  • Who will own the farm?
  • Are you a citizen of the United States of America?
  • Have you paid for all the previous loans?
  • What is your credit history?
  • Can you repay the loan amount?

How to develop my business plan?

To get the loan, you will have to submit your business plan. It should mention how you are operating, how long have you been in the business and how you can repay the loan.

A business plan includes the following:

  • Your goal, mission or vision for the future farm business. 
  • List of your assets (all the valuable things you own). 
  • List of your liabilities (loan, debts or any payment you have not repaid).
  • What you will produce from this business?
  • Your plan to earn enough money to repay the loan. 

You will need a very good business plan to get the loan amount. Your lender is going to have a detailed look at your business plan. Thus it becomes very important to form a solid business plan.

Other than the loan process, it will also help you to organize your business. While creating this plan you may come across things that you were unaware of. It will help you to think about the long term. 

Gather all the documents

You will have to fill out lots of forms and gather a whole bunch of documents to get a loan. Here you can take the help of your business advisor. 

Do not be in haste on this part. It may take some time to gather all the documents, but once approved, you will have the loan amount in your bank account. 

List of forms you need

  • FSA Form 410
  • FSA Form 2037
  • FSA Form 1910-5
  • FSA Form 440-32
  • FSA Form 2038

Additional documents that you may need

  • Farm Description
  • Resume
  • Loan Rejection Letter
  • Financial Records
  • Lease Agreements
  • Contracts, if any
  • Conservation Practices

Apply for a bank loan

You can not directly go to FSA for a loan. You first need to ask the bank for it. Once you have the rejection letter from the bank, you can ask FSA for help. 

By now, most of the hard work is completed. You have all the necessary documents with you, as well as the rejection letter. Now you need to submit all the documents to the FSA. 

You can schedule an appointment with an FSA officer. Submit your application to him or her. You don’t have to be nervous in this part. You are not doing anything illegal. 

Once submitted, FSA will review your application. They will check everything, your credit history, business plan, etc. 

You will receive some letters from FSA during this process. They will update you every time they complete a process. 

  • A letter confirming that your loan has been received. 
  • A letter confirming that they do not need any additional details from you. 
  • A letter specifying their decision. 

If they reject your application, they will tell you the reason behind it. They will also help you in re-applying for the loan. 

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