How to Get a Farm Storage Facility Loan
What it is
| At a Glance | |
|---|---|
| Loan Type: | Farm |
| Lender: | Government |
| Secured: | Yes |
A farm storage facility loan is provided through the United States Department of Agriculture Farm Service Agency, or FSA. It provides farm storage facility loans to family size farmers and ranchers who cannot obtain commercial credit from the bank, Farm Credit System institution, or other lenders. The loan is provided through the Commodity Credit Corporation, or CCC Charter Act. It provides loans to producers to build or upgrade farm storage and handling facilities. The FSA also provides for sugar storage facility loans. This 2002 Farm Bill authorizes loans to processors of domestically-produced sugar cane and sugar beets for the construction or upgrading of storage and handling facilities for raw sugars and refined sugars.
Farm storage facility loans require that 15 percent of the net cost of the project submitted for financial assistance be paid in full and in cash by the applicant. Thus, the CCC's loan is limited to 85 percent of the net cost of the eligible storage facility and permanent drying and handling equipment. The down payment cannot include any trade-in, discount, rebate, deferred payment, or post-dated check. The loan term is seven years and the interest rate is fixed for the loan term based upon the rate in effect during the month the loan is approved. Loans are to be repaid in equal amortized installments.
Who it's for
Farmers aren't always able to be economically stable. Their success is dependent on a variety of uncontrollable factors, including the weather, water conditions and natural disaster. That's why sometimes extra funding can be very important to farmer's whose livelihood depends on the facilities they have. FSA farm storage facility loans are provided to farmers who need funding in order to erect farm storage facilities.
What you need to do to apply
In order to be approved for a farm storage facility loan, a farmer must provide information about economic and financial need, demonstrate that they are having difficult obtaining commercial lending elsewhere, show willingness to repay, and produce collateral.
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