Magazine article Amber Waves

Nearly 14,000 USDA Microloans Issued between 2013 and 2015

Magazine article Amber Waves

Nearly 14,000 USDA Microloans Issued between 2013 and 2015

Article excerpt

In January 2013, USDA's Farm Service Agency (FSA) launched the Direct Farm Operating Microloan program to better serve the credit needs of small farms, beginning farmers, socially disadvantaged applicants (SDA, consisting of women and minorities), and veterans. These Microloans, which have a $50,000 limit, are designed to be more convenient and accessible to new and nontraditional farmers than FSA's traditional Direct Operating Loans (DOLs), which have a maximum loan size of $300,000.

Many farmers who would otherwise be interested in a traditional DOL might forego applying because of the lengthy application process or requirements that can be more difficult for less established farmers to meet. The Microloan program is designed to lower these barriers. Microloans, for example, have relaxed requirements for farm management experience, production history, and collateral.

USDA researchers examined lending patterns in the Microloan program since its inception. FSA has made over 13,800 Microloans as of mid-November 2015. As the chart shows, the number of Microloans grew from 2013 to 2015, both overall and within each group that the program targeted. The number of loans increased 13 percent from 2013 to 2014 and 31 percent from 2014 to 2015. …

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