INDIANA— The U.S. Department of Agriculture’s (USDA) Farm Service Agency (FSA) is celebrating the 25th anniversary of its popular Farm Storage Facility Loan (FSFL) program. The program provides low-interest financing to agricultural producers for building, upgrading, or expanding on-farm commodity storage and handling facilities.
FSFLs are designed to provide low-interest financing for agricultural producers looking to build, expand, or replace their commodity storage and handling facilities and equipment. Used and new equipment are eligible. The loans can also be used to finance new and used equipment for transportation, handling, or storage, including cold storage and controlled atmosphere facilities.
Eligible commodities include grains, oilseeds, peanuts, pulse crops, hay, hemp, honey, renewable biomass commodities, fruits and vegetables, floriculture, hops, maple sap, maple syrup, milk, cheese, yogurt, butter, eggs, meat/poultry (unprocessed), rye, and aquaculture.
Loan terms vary depending on the loan amount:
- Loans under $100,000 qualify for 3, 5, or 7-year terms
- Loans under $250,000 qualify for terms up to 10 years
- Loans under $500,000 can extend to 12 years
Applicants are required to pay a minimum down payment of 15% to the builder/contractor/supplier.
Payments are made in annual installments, which commence one year after the loan closing date.
The program also offers FSFL Microloans, which have a maximum loan amount of $50,000. Microloans focus on the financing needs of small, beginning, niche, and non-traditional farm operations. The minimum down payment is 5% and producers can self-certify their storage need, eliminating the three years of production history required for larger loan amounts.
A satisfactory credit history, sufficient down payment funds on hand, and the ability to make future repayments are all key to loan approval. Additionally, applicants must not be delinquent on federal debt, comply with environmental laws, and provide proof of insurance for the FSFL collateral, including crop insurance for the FSFL commodities.
Applicants are charged a $100 nonrefundable fee per borrower to apply for each loan. This fee is used to cover the costs of credit reports, lien searches, and required filings associated with your loan.
Producers can submit their application at their FSA county office. Although there is no specific deadline, it is best to contact the office as soon as possible to receive approval for the pending purchase. Please remember you must “apply before you buy” to align with program policy and procedure.
For more information, visit the FSFL webpage, view the fact sheet, or contact your FSA County Office.
