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Finances
We've updated our Grants at a Glance factsheet here.
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Financing/Loans
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Engage with the PA Small Business Development Center Agriculture Center of Excellence helps with business plan and finding lenders, market research and industry trends, improving your credit score prior to approaching banks, marketing, etc.
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Lendermatch is a free online tool from SBA. Once you have your business plan you create an account and enter information. (Your SBDC can help.) Once you submit you'll be matched with potential lenders for further conversation.
PA REAP tax credit implementing "Best Management Practices" (BMPs) that will enhance farm production and protect natural resources.
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What information does a commercial bank need when deciding to lend? See a sample Individual Financial Statement form.
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PA's Next Generation Farmer Loan Program uses federal tax-exempt financing to reduce a farmer’s interest rate for capital purchases, such as direct purchase of farm and
agricultural machinery and equipment.
Uses
-Agricultural land
-Agricultural improvements
-Depreciable property
Eligibility
-Permanent Pennsylvania resident who are at least 18 at the time of the loan application
-Must meet lender’s credit standards
-Access to adequate working capital, farm equipment, etc.
-Borrower must not have had any prior ownership of a substantial portion of land.
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DIsaster Relief (USDA) At a Glance
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Farm Credit works with beginning and experienced operators.
FSA (Farm Service Administration) is the federal agency that registers your farmland for access to loans, both operating and ownership
FSA used to be considered 'the loan of last resort' but they prefer to be known as the first place to start. While FSA requires the borrower to exhaust commercial lending possibilities, establishing a connection with your local county office will open doors to a ton of reliable information on lenders. Most FSA loans, except microloans, have a 3 year ag experience requirement; 1 year is typically waived for eligible military service. On-the-job (OJT) apprenticeships/internships may qualify for some of the experience requirement. Get started with FSA. Find your nearest FSA office here.
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FHLP BOB loans
Banking On Business (BOB) funding helps eligible small businesses that lack sufficient equity or cash flow meet lending standards. Loans up to $200,000. BOB funds may be used in financing the startup or expansion of a small business, including:
Building purchase
Land acquisition and construction
Facility expansion
Machinery and equipment purchase
Leasehold improvements
Permanent working capital
Closing costs
BOB loans are only available from member banks through the FHLBank Pittsburgh. Find them. Limited funds are available each year; it's suggested to get your request in early in the calendar year.
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VA Home Loans can be used for farm loans unders certain circumstances. Learn more.
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NRCS Funding and No-cost Technincal Assistance
Funding is available to eligible ag producers for a variety of conservation practices. High tunnels are a popular cost share program. Veterans and/or beginning farmers receive preference points for some programs.
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Grants
Grants for ag are extremely limited. While some are awarded for a project in full, many require a match in order to show the applicant has buy-in and the resources to maintain the project. Don't let inexperience keep you from applying--we can help--email us.
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Agricultural Marketing Service, a part of USDA, offer grant programs focused on local and regional food systems, and the specialty crops, dairy and sheep industries. Factsheet
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Farmer Veteran Fellowship Fund applications are typically open during the first quarter of the year.
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PA DEP's Small Business Advantage Grant typically opens in July . SBAG provides 50% matching grants, up to a maximum of $7000 to enable Pennsylvania small businesses to purchase energy efficient or pollution prevention equipment, or adopt waste reduction processes. Or, up ot $5000 for natural resources protection projects like riparian buffer or fencing for rotational grazing. Grant amount will be up to 50% of the total project cost.
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Information:
The Center for Rural Affairs' Strategies for Financing Beginning Farmers provides user-friendly steps to prepare you to obtain financial support for new ag ventures. Download it.
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The SBA (Small Business Administration) has a variety of resources for beginning farmers, including consulting, business plan help, and loans.
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USDA 2023 Rural Development
Value Added Producer program:
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Examples of Value Added products: fruits made into pies or jams, meats made into jerky, tomatoes and peppers made into salsa, vegetables cut up and packaged for easy cooking, organically grown produce, beeswax into candles.
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Scroll down to download VAPG docs.
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Applications open for Planning grants (typically up to $75,000) and Working Capital grants (typically up to $250,000). Electronic submissions by May 11, 2023.
Paper submissions by May 16, 2023.
There is a 50% match this year. If your total project budget is $100k, you must have $50,000 in match. Some may be in-kind such as the ag product value you're growing, and some labor costs.
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What is Value Added for the purposes of this funding?
An Agricultural Commodity that meets one of the following methodologies:
1. Has undergone a Change in Physical State (such as milling wheat into flour or making strawberries into jam);
2. Was Produced in a Manner that Enhances the Value of the Agricultural Commodity (such as organically produced products);
3. Is Physically Segregated in a manner that results in the enhancement of the value of the Agricultural Commodity (such as trace-ability of hormone-free livestock);
4. Is a source of Farm- or Ranch-based Renewable Energy, including E-85 fuel; or
5. Is aggregated and marketed as a Locally-Produced Agricultural Food Product.
And as a result of the Change in Physical State or the manner in which the Agricultural Commodity was produced, marketed, or segregated:
1. The customer base for the Agricultural Commodity is expanded and
2. A greater portion of the revenue derived from the marketing, processing, or physical segregation of the Agricultural Commodity is available to the producer of the commodity.
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Points for veterans who have operated a farm/ranch for not more than 10 years; applicant must demonstrate that s/he is actively involved in the day-to-day agricultural process.
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Funded projects must be directly related to the processing and/or marketing of value added products. Generating new products, creating and expanding marketing opportunities, and increasing producer income are the end goals of the program.
All proposals must demonstrate economic viability and sustainability to compete for funding (you'll need a business plan).
Get your ducks in a row now:
Register for SAMS. Registration is FREE. Use the link above. if you google SAMS, you'll probably see other sites that want you to pay them to get you registered, which is NOT necessar
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Before approaching a lender or investor, you must have a business plan. Michigan State University Extension's draft template walks you through the process. Download it here. Small Business Development Centers located at colleges/universities throughout PA also provide a variety of services to veterans.
Veterans and those farming 10 years or less receive preference or rating points for many federal programs. Mention your status to program staff--they may not ask.
Information on this page is for educational purposes and does not imply endorsement.