Access to capital is crucial at almost every stage of the farm operation - from starting a new farm, to maintaining or expanding existing operations, to beginning a new diversified enterprise. For many farmers, accessing credit to support and grow their operations is one of the most significant challenges that they face. Fortunately, there are numerous loans and grant programs designed specifically to support farmers in financing agricultural enterprises. This page identifies resources that can help farmers and food businesses better understand and navigate the range of financing options that are available. It also provides information and materials that can help farmers better understand and prepare for the lending process.
Preparing to Borrow
Before you approach any lender or apply for funds, it is important to understand basic information about the borrowing process. Lenders expect that you know your business, understand your finances, and have a clear idea about how you are going to achieve your farm business goals. The more informed you are, the better your chances of getting the financing you need. Development of a good business plan is the most important step to take when preparing to take out a loan.
The Business Planning section of this website provides resources that can assist in preparing a good farm business plan.
Lenders frequently use the following five "Cs" when evaluating a loan application
Capacity to repay the loan.
Capital or the money you have already invested in your business.
Character or the general impression you make on the lender, including qualifications, experience and management skills,
Collateral is the assets you own that the lender uses as a backup to recover funds if you happen to default on the loan.
Conditions surrounding the intended purpose of the loan.
Other resources that may be useful in understanding the basics of accessing credit and preparing applications include:
The Farmers Guide to Agricultural Credit is produced by the Rural Advancement Foundation International and is designed to assist farmers in getting ready to apply for financing for new and innovative ventures. The Guide contains sections on:
- Ag Lending 101
- Credit Basics
- Business Performance Measures
- Business Planning
- Communicating Your Idea to a Lender
Northwest Farm Credit Service has produced a guide, Financing Agriculture: The Business Borrower-Lender Relationship, which provides useful information on criteria to consider when selecting a lender.
USDA has produced a useful video, Spelling out the A, B, Cs of Accessing Business Credit, that aims to connect producers with lending options that make sense for them and their operation.
The United State Small Business Administration provides resources on financing small businesses, including a loan application checklist. Although not specific to farm businesses, the site provides information on the types of documentation needed before starting the loan application process.
The National Sustainable Agriculture Coalition’s (NSAC) Grassroots Guide to Federal Farm and Food Programs contains an overview of dozens of loan and gran programs offered by USDA. Each chapter contains information on program basics, eligibility information, success stories, how to apply, program resources, and program history.
There are many choices available to finance your farm operation. Under the right circumstances, taking on a loan or some other kind of debt can actually help a farm grow and build its capacity for future growth. This section identifies sources of loans that may be available to finance your farm enterprise.
Local Banks, Community Development Financial Institutions and Cooperative Credit
Community Capital Development (CCD) is an economic development organization formed in 1997, created to serve underbanked entrepreneurs with access to capital and comprehensive business technical assistance. CCD provides loans of up to $250,000 for real estate, equipment and inventory, production and working capital. CDC also provides coaching and training to entrepreneurs to help them succeed.
Craft3 is a non-profit, community development financial institution with a mission to strengthen economic, ecological, and family resilience in Pacific Northwest communities by providing loans and financial assistance and resources to entrepreneurs who wouldn’t otherwise have access to capital. Craft3 provides business loans to finance real estate, acquisition of equipment and working capital.
Evergreen Business Capital administers a Rural Loan Program for businesses in rural communities that offers loans of $10,000 to $250,000 for equipment, real estate, leasehold improvements, inventory, working capital, and refinancing.
Farm Bureau Bank offers a variety of loan products including equipment and vehicle loans and mortgage services.
Mercy Corps Northwest provides loans of up to $50,000 to new and existing businesses who may not qualify for traditional bank loans. They also offer classes, seminars and consulting by industry experts to improve business skills and provide support to successfully start and grow your small business.
Northwest Farm Credit Services (NWFCS) is a cooperatively owned agricultural lender specializing in financing to farmers, ranchers, agribusinesses, commercial fishermen, timber producers, and country home owners in Idaho, Montana, Oregon, Washington, and Alaska. NWFCS offers a broad range of flexible loan programs and specially tailored financial services to the agricultural, timber and fishing industries and rural areas. Short-, intermediate- and long-term financing at variable-, fixed- and adjustable-interest rates are available. NWFCS also provides leasing services, appraisal services, and life, mortgage, disability, and crop insurance programs.
- NWFCS administers an AgVision loan program aimed at young, beginning, small or minority producers. AgVision is designed to meet the needs of customers with at least one of the following characteristics:
- 35 years of age or younger
- Less than 10 years agricultural experience
- Recognized minority: African American, Native American, Alaskan Native, Hispanic, Asian, and Pacific Islanders.
- Producer with farm production less than $250,000 annually.
Federal and State Loan Programs
The U.S. Department of Agriculture’s (USDA) Farm Service Agency (FSA) provides financial assistance to farmers, including loan programs makes and guarantees loans to farmers who are unable to obtain financing from commercial lenders. FSA operates a number of loan programs, including:
- Farm Ownership Loans designed to provide farmers and ranchers the opportunity to purchase farmland, construct and repair buildings, and make farm improvements.
- Operating Loans to purchase livestock and feed, farm equipment, fuel, farm chemicals, insurance and other operating costs, including family living expenses, minor improvements or repairs to buildings, and to refinance certain farm-related debts, excluding real estate. The maximum loan amount for a Direct Farm Operating Loan is $300,000. There is no down payment requirement.
- Microloans are a form of operating loan designed with a shortened application process and reduced paperwork designed to meet the needs of smaller, non-traditional, and niche type operations. There is no minimum loan amount. The maximum loan amount for a Microloan is $50,000.
- Emergency Loans provide financial assistance for a qualifying loss caused by a natural disaster to a farming or ranching operation. Funds may be used to restore or replace essential property, pay all or part of production costs associated with the disaster year, pay essential family living expenses, reorganize the farming operation, refinance certain debts.
- Conservation Loans can be used to finance conservation practices in an approved conservation plan.
- Beginning Farmers and Ranchers. FSA targets a portion of its loan funds to beginning farmers and ranchers, including loan programs to assist with the purchasing of a farm.
USDA’s Your Guide to FSA Farm Loans is designed to help farmers understand the loans and guarantees that are available from FSA and provide guidance in getting started with the application process.
The National Sustainable Agriculture Coalition offers an easy to read chart that summarizes all federal farm and food-related programs and grants and explains who is eligible.
The Washington State Housing Finance Commission, in partnership with Northwest Farm Credit Services, manages a Beginning Farmer Rancher Program that provides low-interest loans to help new farmers get started with land, equipment, buildings, and even animals. Loans from this program are limited to $517,700, however, financing can be combined with other loans, grants or other funds for larger projects. Individuals or families that have never owned and operated a farm or ranch before, or those that have owned/operated one that was less than 30% of the county’s median farm size may be eligible.
USDA Rural Development forges partnerships with rural communities, funding projects that bring housing, community facilities, business guarantees, utilities and other services to rural America.
- The Rural Economic Development Loan (REDL) and Grant (REDG) programs provide funding to rural projects through local utility organizations. Under the program, USDA provides zero interest loans to local utilities which they, in turn, pass through to local businesses for projects that will create and retain employment in rural areas.
- Rural Business Development Grants (RBDG) is a competitive grant designed to support targeted technical assistance, training and other activities leading to the development or expansion of small and emerging private businesses in rural areas that have fewer than 50 employees and less than $1 million in gross revenues.
- Rural Microentrepreneur Assistance Program provides microloans for microenterprise start-ups and growth through a Rural Microloan Revolving Fund and provides training and technical assistance to microloan borrowers and micro entrepreneurs
Unconventional Financing Arrangements
University of Vermont Extension’s Guide to Financing Community Supported Farms identifies options for crafting unconventional financial arrangements that have been used in other sectors of the economy but that might be new to the agricultural sector.
Community Sourced Capital (CSC) is an organization that helps businesses access affordable capital from their community either through an online platform for raising money from the borrower’s community, or by connecting entrepreneurs to mission-aligned financial institutions.
Kickstarter is a crowdsource funding platform where you can develop the idea for a project, publish it, and others can choose to donate it. There are dozens of similar services out there, but Kickstarter is one of the largest. Projects that do not reach their funding goals are not awarded any funds.
Kiva Zip is a nonprofit located in San Francisco, California, that offers 0% interest loans up to $10,000 to financially excluded entrepreneurs who lack access to traditional sources of capital. Kiva Zip is actively looking for small farms and food producers that could benefit from their program.
Whole Foods Local Producer Loan Program provides low interest, minimal process loans of up to $100,000 to qualified producers for expansion and capital expenditures (e.g., buy more animals, invest in new equipment and infrastructure, or expand crops).
Technical Advisory Services
Northwest Agriculture Business Center provides support to individual producers or producer groups to prepare strategic, marketing, and business plans including financial projections. These plans can be used to help guide new business start-ups or business expansions, as well as providing support to secure business financing.
NW Farm Credit Services offers custom-facilitated business and loan planning sessions for farmers, ranchers and agribusinesses.
Washington State Small Business Development Centers offer information on funding available to small business owners along with information on training, advising, research, and a long list of resources including business plans, taxes/licensing, start up guides, and much more.
It is important to know that grants are rarely available to start a farm or a business, your own capital or loans are your best option. However, a few grant programs are open to farmers that are willing to do research and/or value-added product development related to their operations. More common are grant programs that available to organizations working on farm and agriculture related projects and programs. The grants that are available are highly competitive so apply only if the project you are proposing clearly meets the grantor’s objectives. Always find out what kinds of projects were funded in the past to determine if your project is in line with what has been funded.
Grant Writing Resources
The Foundation Center offers an online Proposal Writing Short Course that provides a step-by-step overview of how to write a successful grant proposal and an audiobook version of the Center's Guide to Proposal Writing by Jane C. Geever. The Foundation Center also offers free webinars on Proposal Writing Basics.
How to Develop and Write a Grant Proposal is a report from the Congressional Research Service that covers writing proposals for both government and private foundations grants, including gathering preliminary information, developing proposal ideas, and gathering community support.
The Puget Sound Grant Writers Association offers information about grant writing websites and online training, books, classes and workshops, and where to find technical assistance.
Beginning Farmer and Rancher Development Program (BFRDP)
The BFRDP is administered by the National Institute for Food and Agriculture (NIFA) of the USDA. The program provides grants to organizations for education, mentoring, and technical assistance initiatives for beginning farmers or ranchers.
Community Food Projects (CFP) Competitive Grants Program
The CFP Program funds projects that improve food distribution, improve access to food, promote comprehensive responses to local food access, farm, and nutrition issues; and the creation of innovative marketing activities that mutually benefit agricultural producers and low-income consumers.
Energy Savings Initiative
A USDA NRCS program to assist producers to conserve energy on their farms through an Agriculture Energy Management Plan (AgEMP), also known as an on-farm energy audit and provide assistance to implement various recommended measures identified in an energy audit.
Farmers Market and Local Food Promotion Program Grants
The Farmers Market Promotion Program (FMPP) aims to improve and expand farmers markets, roadside stands, community-supported agriculture programs and other direct producer-to-consumer market opportunities.
The Local Food Promotion Program (LFPP) fund local and regional food business enterprises that serve as intermediaries to process, distribute, aggregate, and store locally or regionally produced food products.
Federal State Marketing Improvement Program (FSMIP)
FSMIP provides matching funds to State Departments of Agriculture and other appropriate State agencies to assist in exploring new market opportunities for U.S. food and agricultural products. Check with WSDA to determine program details for Washington State.
Natural Resource Conservation Service (NRCS)
The Agricultural Conservation Easement Program (ACEP) provides financial and technical assistance to help conserve agricultural lands and their related benefits. Under the Agricultural Land Easements component, NRCS helps Indian tribes, state and local governments and non-governmental organizations protect working agricultural lands and limit non-agricultural uses of the land.
Eligibility: Farmers and Organizations
USDA’s organic cost-share programs provide assistance for certification related expenses through participating States, to organic producers and/or organic handlers. Payments cover up to 75 percent of certification costs, up to a maximum of $750 per certification. Program details change annually so check with WSDA for the latest program information.
The EQIP Organic Initiative: This assistance from the USDA Natural Resource Conservation Service (NRCS) helps producers plan and implement conservation practices to support the environmental sustainability of their organic operations. Each fiscal year, NRCS will focus financial and technical assistance through the EQIP Organic Initiative for eligible applicants and land.
Rural Business Development Grant Program (RBDG)
The RBDG program is designed to develop and expand rural small and emerging private business enterprises. Grant funds may be used for targeted technical assistance, training and other activities to support the development of small, private business enterprises. Program details change annually so check the program website for Washington specific information.
Rural Cooperative Development Grant Program
The primary objective of the RCDG program is to improve the economic condition of rural areas by assisting individuals and businesses in the startup, expansion or operational improvement of rural cooperatives and other mutually-owned businesses through Cooperative Development Centers.
Seasonal High Tunnel Initiative
A USDA NRCS Program available to agricultural producers, designed to strengthen local and regional food markets and increase the use of sustainable conservation practices that will improve plant and soil quality, reduce nutrient and pesticide transport and reduce energy inputs and produce local produce.
Socially-Disadvantaged Groups Grant
The primary objective of the SDGG program is to provide technical assistance to socially-disadvantaged groups through cooperatives and cooperative development centers. Each fiscal year, applications are requested through a Notice published in the Federal Register and an announcement posted on Grants.gov.
Specialty Crop Block Grant Program (SCBGP)
The purpose of the SCBGP is to enhance the competitiveness of specialty crops. Specialty crops are defined as "fruits, vegetables, tree nuts, dried fruits, horticulture, and nursery crops (including floriculture)." WSDA administers the program and award grants for projects that enhance the competitiveness of Washington’s specialty crops. Contact WSDA for program details.
Sustainable Agriculture Research and Education (SARE) Program
SARE is a USDA-supported grant and education program that funds research and education projects for farmers and ranchers. The program is run by four regions—North Central, Northeast, South and West, each guided by a volunteer Administrative Council that makes grants and sets regional priorities.
Eligibility: Farmers and Organizations
Value Added Producer Grant Program
The VAPG program helps agricultural producers enter into value-added activities related to the processing and/or marketing of bio-based, value-added products. Generating new products, creating and expanding marketing opportunities, and increasing producer income are the goals of this program. Program details change annually so check for details and local contact information.
Other Grant Programs
King Conservation District Regional Food System Grant Program
The KCD RFS Program funds food system-related projects with demonstrated public benefit and a link to improving working lands in King County. The program is designed to support projects that contribute to the economic viability of local farmers, encourage new farmers, expand acreage in food production, improve food access, and increase demand for King County farm products.
Eligibility: Farmers and Organizations
The Humanlinks Foundation’s mission is to support sustainable agriculture in Washington State. The Foundation offers a grant program to farmers who need financial assistance to run their farms. The program is open to farmers who utilize organic and sustainable farming practices.
The Kellogg Foundation supports community efforts to strengthen the "value chain" of local food systems from seed to table, through sustainable production, farmers markets and cooperatives, fair treatment of farmworkers and investment in local economies.
Kresge Foundation - Fresh, Local & Equitable Initiative
The Kresge Foundation is supporting food-oriented initiatives that contribute to economic revitalization, cultural expression and health in low-income communities.
PCC Community Grants
Four times each year, PCC awards a $1,000 grant to a school or nonprofit that exemplifies the spirit of the local community, with a particular emphasis on projects and programs that involve food, especially those relating to food education, nutrition and/or food sustainability.
Surdna Foundation - Sustainable Environments Program - Regional Food Supply
The Sustainable Environments Program supports efforts to restore regional aggregation and distribution of food that will strengthen urban and rural connections and provide environmental, economic, and community benefits.
Farm Aid grant funds are invested in programs that help farm families stay on their land, build local markets, confront the threat of corporate control of agriculture, train new farmers and support farmer-to-farmer programs for more sustainable agricultural practices.
Eligibility: Farmers and Organizations
Washington State Recreation and Conservation Office – Farmland Preservation Program
The Farmland Preservation Grant Program provides funding to cities, counties, and others to buy development rights on farmlands to ensure the lands remain available for farming in the future.
The Bullitt Foundation focuses its grant making on four program areas: Ecosystem Services, Energy, Industry, and Technology, Urban Ecology, and Leadership and Civic Engagement. It has a special interest in demonstrating innovative approaches that promise to solve multiple problems simultaneously.