USDA: FSFL program now includes microloan option

By Erin Voegele | May 06, 2016

On April 29, the USDA announced changes to the Farm Storage Facility Loan Program, which provides low-interest financing so agricultural producers can build or upgrade permanent facilities to store commodities. Renewable biomass is among the list of commodities eligible for the program.

The FSFL program has been updated and now includes a microloan option with lower down payments. It allows applicants seeking less than $50,000 to qualify for a reduced down payment of 5 percent and no requirement to provide three years of production history. Farms and ranches of all sizes are eligible. According to the USDA, the microloan option is expected to be of particular benefit to smaller farms and ranches, and specialty crop producers who may not have access to commercial storage or on-farm storage after harvest. The USDA indicated these producers can invest in equipment like conveyers, scales or refrigeration units and trucks that can store commodities before delivering them to markets. Producers do not need to demonstrate the lack of commercial credit availability to apply.

Information published in the Federal Register indicates FSFL program loans are available in amounts up to $500,000 for terms not to exceed 12 years. Loans can be used for on-farm storage and handling facilities, including drying and cooling equipment, safety equipment, and new concrete foundations, as well as for storage buildings and grain bins. The notice explains the FSFL program benefits producers who lack local commercial storage options or have limited marketing options for their commodities at harvest time. FSFL program loans, however, are not available for crop production equipment.

Additional information on the FSFL program and the new microloan option is available on the Federal Register website