Small Business Farm Microloans

Farming is not exactly the rage in the US these days. Out of more than 313 million people in the country, less than 1% of them are farmers. And of these farmers, less than half claim it as a principal occupation.

Yet despite the dwindling number of farmers, it’s an undeniable fact that the efficiency of the American farmer is still impressive. US farmers are still among the best in the world. For proof, consider that 3 million farmers are responsible for exporting $115 billion worth of agricultural products all over the world.

The Challenges Faced by Farmers in the US

Today, it’s not really all that easy to be a farmer. Challenges faced by farmers all the time include climate change, the inadequacy of current soil and water conservation, the abuse of pesticides, and genetic modification.

There’s also the fact that farming is not a popular industry among the youth. The average age of a principal farm operator was 54 years old back in 1997. By 2007, that age increased to 57 years old.

Finally, there’s also the matter of economics. The average expenses incurred by farm production is $109,359 a year. Meanwhile, less than 25% of all farms in the US generate revenues of more than $50,000.

The Perseverance of US Farmers

All these challenges have not deterred most farmers from continuing in their efforts to become viable farms. But often they need more capital to take full advantage of the opportunities they encounter. However, financing is often difficult to come by. Some farmers are just beginning in their farming endeavor, so they may not have the necessary credit or collateral to secure the loan they need.

This is where small business farm microloans come in.

The Advantage of Farm Microloans

These microloans are extremely convenient for many farmers to make their business more efficient. These loans are comparatively easier to get. The application process usually takes less time than a traditional loan to process, and the needed paperwork is significantly reduced.

The maximum amount you can get as a small business farmer is $50,000 which is an improvement from the previous $35,000 limit. There is no minimum amount for the loan and you can use the money to:

  • Buy livestock such as chickens and pigs, and the feed for them as well
  • Get much needed farm equipment such as tractors
  • Cover operational costs such as fuel, farm chemicals, and insurance, along with family living expenses
  • Make minor improvements or repairs to farm structures and buildings
  • Refinance some particular debts related to farming
  • Hire management and leadership roles not directly related to farming, such as a marketing director

Limitations of the Farm Microloans

Microloans often require shorter repayment periods, and farming microloans are no exception. The loans must be full repaid within 7 years.

In addition, the loan cannot be used to finance non-farm operations, and that includes horses for non-farm purposes (racing or for pleasure, for example), dog raising, tropical fish, earthworms, and exotic birds.

Still, even with these limitations, the availability of microloans can help new and struggling farmers. These people need all the help they can get to make enough money to support their business. Fortunately with farm microloans, they can.