Youth loans available from Farm Service Agency
Aberdeen – Too inexperienced to have established credit? Too young to get a loan? No record of success to qualify for financial assistance? Not necessarily so, said Lyn Halvorson, Brown County Farm Service Agency (FSA) Farm Loan Manager. FSA has a special loan program for young people 10 years to 20 years old who need financing to get started in their first money-making enterprise.
FSA’s Youth Loans are made specifically to young people participating in an organized program of work, such as 4-H Clubs, Future Farmers of America, or similar organizations. To qualify the applicant must live in a rural area or town of less than 50,000 population, and comply with FSA’s general loan eligibility requirements.
The maximum loan amount is $5,000. The loan project will be supervised by the project advisor such as a 4-H leader, FFA chapter advisor, or similar project advisor. Halvorson said youth loans have traditionally been used the for purchase of breeding livestock or crop input costs, however the project loans may also be used for a variety of other income producing projects provided they are agriculture related and will produce sufficient income to repay the loan.
The program will allow youth with the educational experience of successfully conducting a farm business operation in a supervised program of work.
Repayment terms will be worked out with FSA and tailored to the type of project for which the loan was made. If the loan is to raise livestock or crops for resale, it would normally be repaid when the produce or livestock is sold. A loan made for the purchase of foundation breeding livestock would allow for an amortized annual payment up to a 7 year term. The current interest rate for the program is 1.25%. Rates are determined monthly, however are fixed for the term of the loan upon approval.
For more information on the program, call the Farm Service Agency at (605) 226-3360. The Brown County FSA office is located at 524 S. Enterprise St. Aberdeen, S.D.