Are FSA Loans Right for You?
If you are a farmer or a rancher that is in need of funding to start a business, expand a current business, sustain your business, or simply make changes to your business, a FSA loan may be right for you. Individuals that seek these types of loans may have a desire to engage in the following:
- Purchasing or leasing a ranch or a farm
- Purchasing items such as piping, a greenhouse, livestock, or supplies to tend to the previously mentioned, such as a tractor
- Recover from ruined crops
- Recoup losses to buildings and/or equipment
- Expanding current operations
How Are FSA Loans Different?
The FSA loans are temporary. They are not issued by a commercial lender, but, are designed to push towards loans from commercial lenders. There is a guaranteed loan program that is available through banks, credit unions, and the Farm Credit System. On this program the FSA helps to guarantee the loan of the financial institution from losses up to a total of 95%. Somerville Bank works with this program and provides the following types of loans to those that qualify:
- Direct Farm Ownership
- Direct Down Payment
- Direct Emergency
- Direct Operating
- Guaranteed Farm Ownership
- Guaranteed Operating
- Guaranteed Conservation
- Land Contract Guarantee
Rates and Terms
When receiving an FSA loan, you will need to pay back the principal – which is the amount of the loan – plus the interest. The “rate” is the actual rate of interest from your lender. The “term” specifies the amount of time that you are responsible for making payments on the loan. The total amount of interest that you will be charged will be based on the term of the loan, as well as the rate that you agree upon with your lender. FSA loans include those that have a fixed interest rate and a variable interest rate.
There are eligibility requirements in place for those that wish to get an FSA loan. In most instances, the following qualifications must be met:
- The applicant must not have operated the farm or the ranch for a period of over one decade.
- The applicant must be a citizen, a qualified alien, or a non-citizen national.
- The applicant must either be starting their business or be considered a farmer or a rancher that is regarded as “socially disadvantaged.
- The applicant must be unable to obtain funding from another source.
- The applicant’s farm/ranch must be their main business with a verifiable income.
Depending on the type of FSA loan sought, the qualifications may vary.
If you have a desire to learn more about FSA Loans and want to start the application process, you may visit us at one of our 7 locations.
These include our Ohio Locations: North Eaton, South Eaton, Somerville, Camden, Oxford, Hamilton, and the Mortgage Center in Richmond Indiana.
For more information, simply contact one of our friendly staff and we will be more than happy to assist you.
Come See Us
For any of our Lending Products
Sr. Ag. Specialist
Commercial & Ag Lender
Sr. Ag. Specialist