It’s not easy getting started in farming due to high startup costs. To ensure sound credit is available to young, beginning, and small farmers, GreenStone and the Farm Service Agency (FSA) have programs to support this very critical segment of the agricultural industry.
FSA’s program is the Beginning Farmers and Ranchers Loan Program, while GreenStone serves this market with our CultivateGrowth program.
What really brings value to you is the partnership between the two. Your local GreenStone team works closely with FSA to help give young, beginning, and small farmers as many options as possible to help them be successful in agriculture.
Who is eligible?
- A young farmer 35 years of age or younger
- A beginning farmer with 10 or fewer years of experience
- A small farmer who generates less than $250,000 in annual gross sales from production agriculture
Options to benefit you
With this partnership between GreenStone and FSA, farmers can secure financing in a number of ways. We can partner together to each directly finance real estate purchases through options like the 50/45/5 program and the 50/50 loan program.
To break it down, that means GreenStone provides 50% of the loan funds for the purchase, FSA provides 45% of the loan funds for the purchase, and the farmer brings the remaining 5% of the purchase.
Or, in the 50/50 case, GreenStone and FSA split the financing. These options substantially reduce or eliminate down payment requirements to the farmers, to help them preserve cash reserves for other purchases and needs.
Additionally, lenders like GreenStone can utilize FSA guarantees, which are credit enhancements that allow lenders to provide sound credit to those operations that do not meet standard loan underwriting criteria.
When the guarantee enhancement is utilized, loans can be used for equipment purchases, operating expenses, or land acquisition. GreenStone works with FSA to help farmers start out on sound financial ground.
Beyond these partner financing options, FSA farm programs also include commodity and price support, conservation, and disaster assistance programs. Additionally, FSA provides credit to producers who may be unable to receive credit elsewhere.
FSA’s programs place a special emphasis on providing loans to beginning, minority, and women farmers and ranchers.
Preferred lender value
GreenStone is a preferred lender with FSA. This is the highest status that a lender can hold in the FSA Guaranteed Farm Loan Program. This status was developed to recognize experienced lenders that have demonstrated significant expertise and understanding of agricultural lending and the FSA Guaranteed Farm Loan Program.
Lenders such as GreenStone benefit from streamlined submission requirements, decreased turnaround time on FSA actions and authorization to originate and service guaranteed loans, as they would other loans in their portfolio.
For instance, thanks to GreenStone’s preferred lender status, your GreenStone financial services officer sometimes has the ability to use an express scorecard, depending on your loan request, to get results quickly.
If you’re not working with a preferred lender, sometimes you have to wait weeks for FSA approval. We can also get the underwriting process underway for loans outside of the scorecard express.
Help along the way
Through our CultivateGrowth program, GreenStone also provides financing with relaxed underwriting standards. These options, along with our agricultural expertise and understanding of FSA programs, help farmers overcome farming financial challenges.
Another attractive part of the program is flexibility with down payment discussed earlier, discounted programs, and discounted appraisal costs.
GreenStone is a good partner for new farmers because we’re a one-stop shop. For instance, beyond the range of financing options, we have staff who can provide a free tax and accounting review, and a team to discuss risk mitigation strategies like crop insurance — we’re a complete financial partner with you.
Our assistance also goes beyond financing. Our commitment to the next generation of farmers also supports educational opportunities and involvement in youth organizations. With an array of tools, from grants and mentorships, to scholarships and educational resources, GreenStone is committed to help young, beginning, and small farmers to find success.
Working with FSA is just one of the tools in our toolbox — contact us anytime to learn about them all!
Agriculture isn’t a job that stops at 4:30 p.m. Our team is here locally to assist, and we’re flexible to meet your unique timelines and needs.
For more information, visit greenstonefcs.com/cultivategrowth or www.fsa.usda.gov/FSA.
*Written for the Michigan Farm News Dollars and Sense Column
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