The U.S. Department of Agriculture (USDA) Farm Service Agency (FSA) Administrator Val Dolcini today announced that additional funding will be made available to assist more than 1,900 approved applicants who are awaiting farm operating loans.
The funds, which were reprogrammed by FSA with the approval of Congress, will leverage up to $185 million in additional lending for direct and guaranteed farm operation loans and will allow the agency to address up to 30 percent of its projected shortfall of funds until the next federal fiscal year resumes on Oct. 1.
“Some of our farming and ranching customers are experiencing challenges due to market conditions and have been on a wait list for up to 60 days, so this will help those applicants whose paperwork has been pending the longest period of time to obtain credit or restructure loans as needed,” said Dolcini. “While the backlog in loan applications will grow between now and the end of the fiscal year, it is important for borrowers to continue to apply since we will process loans on a first-come-first-served basis based on the application date, once funding is replenished in fiscal year 2017.”
FSA loan funds have been in higher demand than in past years. As a result, funding for FSA’s farm operating loans has been unable to meet the demand for the remainder of this fiscal year, which ends Sept. 30, 2016. In fiscal year 2016, FSA has guaranteed loans to more than 6,400 customers for farm ownership and operating purposes.
USDA also reminded lenders and potential borrowers of the loan guarantee programs available from the Small Business Administration (SBA) that can be used for similar purposes as FSA guaranteed loans. Some lenders work with both FSA and SBA on loan guarantees and can switch between the programs. This ability to switch between programs means the SBA programs can provide a financing alternative for agricultural producers when their lender is unable to close an FSA guaranteed loan, such as when funds have expended for the fiscal year.
More information about SBA loan programs can be found at www.sba.gov/loans. To learn more about USDA farm loans, visit www.fsa.usda.gov/farmloans or contact a local USDA office. To find the nearest USDA office, visit offices.usda.gov.