Funding Resources (Loans and Grants) are often crucial to starting a new farm business. This page contains comprehensive information about finding financial help for starting your farm business. It is also important to be aware that farm business planning is usually an essential component for obtaining funding, for either loans or grants for farm enterprise. We encourage you to visit ourFarm Business Planning Pageto learn more about how to develop a business plan.
The National Sustainable Agriculture Coalition’s Guide to USDA Funding for Local and Regional Food Systems is a great resource which discussesGrants and Loansfrom: the Community Outreach and Assistance Partnership Program; Specialty Crop Block Grants; Farmers Market Promotion Program; Federal State Marketing Improvement Program; Beginning Farmer and Rancher Development Program (also see above); Community Food Projects Competitive Grant Program; Sustainable Agriculture Research and Education (SARE); Value Added Producer Grants; Rural Business Enterprise Grants; Rural Business Opportunity Grants; Rural Cooperative Development Grants; Community Facilities Grant Program; Small, Socially Disadvantaged Producer Grants; Business and Industry Guaranteed Loan Programs; Outreach and Assistance to Socially Disadvantaged Farmers and Ranchers; as well as Regional Resources.
The Center for Farm and Rural Business Finance offers an excellent publication calledA Farmers Guide to Agricultural Creditwhich explains the lending process and what you will need to secure any kind of farm loan. It is highly recommended.
RAFI USA has a publication called The Farmer’s Guide to Agricultural Credit. This guide was written to help farmers understand agricultural finance, and to help them be better prepared for the credit application process. It introduces some effective planning tools farmers can use to increase their opportunities in accessing capital. Also offered are appendices containing resources for further learning.
Building Sustainable Farms, Ranches, and Communities“is a guidebook written for anyone seeking help from federal programs to foster innovative enterprises in agriculture and forestry in the United States. Specifically, the guide addresses program resources in community development; sustainable land management; and value-added and diversified agriculture and forestry.”
Karen Klonsky, an Extension Specialist at University of California, Davis has written a simple, but excellent document calledHow to Finance a Small Farmand Kent D. Olson, a UC Davis Cooperative Extension Economist has written one calledFarm Leases and Rents. Both publications are valuable resources, and are part of the University’s excellentFamily Farm Series of publications.
The Carrot Project “is a non-profit organization dedicated to creating financing solutions for small- and midsized farms, limited-resource farms, and those using ecologically sound practices. Our singular program model is designed to incubate and establish alternative financing programs in combination with business technical assistance.” Although their loan programs are focused specifically on farmers in New England, (and now expanding to New York) they do have a great deal of information that may be applicable and useful to beginning farmers everywhere. These include reports such as ‘Lessons Learned: The 2009 Microloan Fund for New England Farmers‘ and Are Northeast Small Farmers in a Financing Fix? Research Results on Financing Gaps and Program Opportunitiesrelevant to beginning farmer financing, and a quarterlyE-Newsletter.TheirFarmer Resources Pagelists both Farm Financing Options and Farm Business and Financial Planning Resources, some of which areMulti-state, while others areNew England (and New York) specificand listed by state.New England (and New York) Farmers can apply for theirFarm Financing Program. They also provideInformation for Investorsinterested in using their financial resources in a socially responsible way, by investing in projects that help to foster the growth of new farmers. Definitely a fantastic project that is worth checking out, for anyone interested in procuring loans to help build their farm business, folks who want to help support the growth of small, local beginning farmers, or institutions or groups thinking about starting a similar program in their area.
TheEquity Trust Fundis capitalized by socially motivated investors and donors. It uses its capital to make low-interest loans for community development, educational or agricultural projects: That promote the long-term interests of local communities as well as their individual members; That demonstrate the efficacy of land ownership models that balance the interests of individuals and communities; That promote social and economic justice; That promote environmentally conscious, economically sustainable land use; and that would be unlikely to receive financing from conventional sources.
4) Links to State Loan Programs (listed alphabetically):
Wyatt Fraas, from theCenter for Rural Affairs (CFRA)has kindly pointed out that most of these programs are run by State Departments of Agriculture. If your state isn’t listed, contact your Dept. of Ag. to see if they have a new program, and to make them aware that there is demand for beginning farmer loan programs in your state.
Illinois has a Beginning Farmer Bond Program administered through the Illinois Finance Authority, which provides reduced interest rates for purchasing farmland. For more information visit: http://www.il-fa.com/node/973.
Washington State has a Beginning Farmer/Rancher Loan Program offered through the Washington State Housing Finance Commission and Northwest Farm Credit Services. For more information visit:http://www.wshfc.org/FarmRanch/index.htm
Every Farm Credit institution has some kind of enhancement program for young, beginning, and small (YBS) farmers. Since each of those 90 institutions is independently operated, their YBS programs are not the same–they are tailored to local needs. Many Farm Credit institutions have what they offer on their websites, but many do not go into the specifics unless a local office is contacted. Tofind your nearest Farm Credit office, go tohttp://www.farmcreditnetwork.com/about/locations.