Have you ever considered a farm loan, but weren’t sure what it involved? Good news – we’ve got the answers! Keep reading to learn more. 

• What is a FSA Direct farm loan used for?

A farm loan is for farmers or ranchers who want to purchase, sustain or expand your family farm but aren’t able to get credit elsewhere in order to do so. Some of the possibilities include purchasing livestock, equipment, feed, land or more buildings. 

• What’s the difference between a direct loan and a guaranteed loan?

Direct loans use government money and are serviced by FSA. Credit counseling and supervision are also provided by FSA to help applicants with evaluation. On the other hand, guaranteed loans are funded and serviced by Timberwood Bank. FSA guarantees up to 90% of the loan against loss typically.

• What are the different types of loans?

There are many different types of loans that you need to decide between before applying. These include farm ownership loans, operating loans, emergency loans and conservation loans. For more information on what each of these loans includes and which loan you should apply for, contact your local FSA office or Timberwood Bank.

• What’s a business plan, and what does it include?

A detailed business plan is submitted when applying to get an FSA loan. This plan shows your goals and plans for the future, and that you’ve put serious thought into them. Some things your business plan would describe includes your vision for your farm/ranch, your assets, your marketing plan and the planning of your expenses.

• What happens after my application is submitted?

Your application will be reviewed and soon after you’ll be informed of any information you missed and need to include. On the FSA Direct loans FSA will work directly with you to work towards a loan approval.  On a FSA guaranteed loan FSA will work with the bank to get any additional information needed to approve the guarantee for the bank’s loan.

There’s a lot that goes into applying for a farm loan, but we’re here to answer any questions you may have. For a detailed explanation of the FSA loans, application process, and much more, read through this booklet.