State treasurer, USDA establish farmer loan program
Through an agreement between Missouri State Treasurer Clint Zweifel's office and the U.S. Department of Agriculture Farm Service Agency, farmers getting their starts in the state could have an easier time financing their agricultural businesses.
According to a Jan. 24 news release, effective immediately, first-time Missouri farmers who qualify for Linked Deposit Program loans could receive a loan guarantee of 95 percent from the FSA and waivers of the 1.5 percent origination fee.
“This is a great economic development tool for farmers because it encourages them to get started,” Zweifel said in the release. “We are lowering the interest rates and increasing the availability of loans because the USDA is taking almost all of the credit risk and waiving fees for the new farmers.
"This is critical, because we know access to credit is essential for a successful agricultural operation.”
A beginning farmer who receives a Linked Deposit Program loan may use the proceeds as working capital, or to purchase agricultural land, farm buildings, new and used farm equipment, and livestock.
Through the Linked Deposit Program, managed by the treasurer's office, qualified borrowers - businesses with fewer than 100 employees - generally save roughly 30 percent on the cost of the loan.
In 2011, Zweifel's office issued nearly $24 million in the low-interest loans to 115 beginning farmers, who saved an estimated $370,000 in interest, the release said.[[In-content Ad]]