Agricultural Financing

USDA Loans

USDA (United States Department of Agriculture) B&I (Business & Industry) loans were set up in an effort to improve rural communities, by assisting in the creation of and saving jobs. Securing financing in small towns is often a very difficult task as most national and regional banks will NOT lend to borrowers with commercial real estate located in communities with fewer than 50,000 people. This program fills that void. The benefits with the USDA B&I program are many. Higher leverage (up to 80%), and relatively flexible underwriting standards top the list. Loan amounts range from $500,000 to $25,000,000. B&I loans are normally amortized over 30 years, which can have a dramatic increase in cash-flow compared to a 20 year schedule which is more common with small town local banks.

Criteria for USDA Loans

Eligible Borrowers

Any legal entity including individuals, public and private organizations and federally recognized Indian tribal groups.

There is no size restriction on the business.

Use of Proceeds

B&I Loans may involve acquisitions, construction, conversion, repair, modernization or debt refinance.

Loan proceeds can be used for real estate acquisition and/or improvements, machinery, equipment, furniture, fixtures and working capital. Closing costs and guarantee fees are also eligible meaning you can roll the closing costs into the loan amount.


All B&I Loans are fully amortized with no balloons or call dates.

Repayment terms are up to 30 years for real estate and improvements, up to 15 years (or useful life) for machinery, equipment, furniture and fixtures and up to 7 years for working capital.

Rates are based on a spread over the Prime Rate. Rates vary depending on the specific strengths of the transaction.

Agricultural (FSA) Loans

FSA (Farm Service Agency) Loan program

FUNCTION: Serves as USDA’s primary farm loan program to help qualified farmers and ranchers obtain credit, when they do not meet the lender’s normal underwriting criteria.

Loan Purposes

Guaranteed Ownership Loans

Guaranteed Farm Ownership (FO) Loans may be made to purchase farmland, construct or repair buildings and other fixtures, develop farmland to promote soil and water conservation or to refinance debt.

Guaranteed Operating Loans

Guaranteed Operating Loans (OL) may be used to purchase livestock, farm equipment, feed, seed, fuel, farm chemicals, insurance and other operating expenses. Operating Loans can also be used to pay for minor improvements to buildings, costs associated with land and water development, family living expenses and to refinance debts under certain conditions.

Maximum Loan Size

FSA can guarantee OL or FO loans up to $1,355,000 (amount adjusted annually based on inflation).

Loan Terms and Interest Rates

Repayment terms vary according to the type of loan made, the collateral securing the loan and the producer’s ability to repay. OL are normally repaid within 7 years and FO loans cannot exceed 40 years.

The Guaranteed loan interest rate and payment terms are negotiated between the lender and the borrower within certain allowable benchmarks.