The federal Farm Service Agency (FSA) offers farm ownership and farm operating loans to agricultural producers who may not find success obtaining loans from their traditional financial institutions because of COVID-19. Farmers who cannot obtain commercial credit from a bank can apply for FSA direct or guaranteed loans.
“Farming and ranching is a capital-intensive business and FSA is committed to helping producers maintain their agricultural operations during this time of crisis,” said Gary Six, FSA state executive director in Texas. “FSA loans
are designed to assist beginning and historically underserved farmers and ranchers, as well as those who have suffered financial setbacks from natural disasters or economic downturns. Producers may find that an FSA loan is the best option for them if they cannot qualify for a loan with their traditional financial institutions or other financial institutions because of COVID-19.”
USDA offers a variety of loans to meet different production needs. Direct loans are made to applicants by FSA. Guaranteed loans are made by lending institutions who arrange for FSA to guarantee the loan. FSA can guarantee up to 95 percent of the loss of principal and interest on a loan. The FSA guarantee allows lenders
to make agricultural credit available to producers who do not meet the lender’s normal underwriting criteria.
