New Microloan Proposal Helps Small Farmers
May 25, 2012
As part of ongoing efforts to streamline and modernize its services to American agriculture, Agriculture Secretary Tom Vilsack announced this week that the U.S. Department of Agriculture is seeking comments on a proposal to improve its operating loan program to better meet the needs of small farmers with a new microloan program.
Under the microloan proposal, producers who need a loan for less than $35,000 may apply using simplified and streamlined procedures. The program will cut the required paperwork in half and simplify the process to obtain a loan. The goal of the microloan program is to better meet the credit needs of small farm operations while making more effective use of Farm Service Agency resources.
Small farmers often rely on credit cards or personal loans, which carry high interest rates and have less flexible payment schedules, to finance their operations. The improvements aim to offer a more efficient processing time for smaller loans, adding flexibility to some of the eligibility requirements and reducing the application requirements.
The proposed rule may be viewed at www.gpo.gov/fdsys/pkg/FR-2012-05-25/html/2012-12685.htm. Comments should be submitted no later than July 23.