A loan program designed to help nontraditional farmers start or expand their businesses is doubling the maximum amount that emerging farmers can borrow.
The Pilot Agricultural Microloan Program from the Minnesota Department of Agriculture’s Rural Finance Authority can be used for working capital, equipment and other farm asset purchases with a common useful life of 10 years or less.
The Minnesota Legislature this year appropriated funds to expand the maximum loan amount from $10,000 to $20,000.
“We know that agricultural opportunity is not equally available to all Minnesotans. We also know that there is an urgent need to address the future of farming in Minnesota,” says Patrice Bailey, MDA assistant commissioner. “We at the MDA are examining how to better support emerging farmers and this is one more tool we can use to increase our support for farmers who have traditionally faced barriers to the education and resources necessary to succeed.”
Loans are obtained through participating local lenders. To be eligible, applicants must be a resident of Minnesota; be a member of a protected group or a qualified non-citizen as defined under Minnesota statutes; use the funds toward production and marketing of specialty crops or eligible livestock; and demonstrate an ability to repay the loan.
The Pilot Agricultural Microloan program is an initiative to assist new and established farmers. The program’s focus is to assist non-traditional farmers in the transition from their current situation to one where operators qualify for traditional avenues of agricultural credit.
Applicants can access up to $20,000 per operation, or 70% of annual produce value, whichever is less. Interest rate will be negotiated with the intermediary lender yet be no higher than 10%.
Loan funds may be used by the borrower for annual inputs such as seed, feed and other common farm expenses; small machinery or equipment purchases; and other short-term farm purchases necessary for the farm.
Loan funds cannot be used to buy land, purchase cooperative stock or refinance current debt obligations.
For more information on the program, contact the Minnesota Rural Finance Authority in St. Paul, 651-201-6004, or visit the Pilot Agricultural Microloan Program online.