Access to Land and Capital

Cattle graze in a field outside of Walcott, Iowa

Two of the biggest challenges facing new farmers and ranchers are access to land and access to capital. Capital needs range from buying the farm itself to financing your business. USDA and our partners have many tools that you can use when taking these first key steps.

On the left side the text: Access to Land and Capital; FSA; e.g. buying farmland, investing in farm equipment. On the right side: Financing Ag Businesses; FSA + RD + SBA; e.g. creating a value-added product, building a processing facility. In the middle of the graphic is an arrow pointing both ways.

The first and most critical step to obtaining financing is a good business plan.  For resources and guides, please visit the business planning section of this site.

To apply for USDA assistance, or to get more information, please visit a local USDA service center. Remember, some service centers do not offer all services. If you have any questions, please contact the service center before making the trip.

  • USDA’s Farm Service Agency (FSA):  Although appointments are not necessary, they are strongly recommended to avoid an unexpected wait. You will need a farm number and a business plan.
  • USDA’s Rural Development (RD): Find an office near you, or check out your eligibility online.

Small Business Administration (SBA): To start the process of obtaining financing from SBA, you should visit a local bank or lending institution that participates in SBA programs. LINC is an online referral tool to connect small business borrowers with participating SBA Lenders. Prospective borrowers complete a short, online questionnaire. Questionnaire responses are forwarded to participating SBA Lenders that operate within the borrower’s county. If lenders are interested in the referral, the lender and prospective borrower’s contact information are exchanged. The SBA Loan Application Checklist details the forms and documents you and your lender will need to create a loan package for submission to SBA.



Loans for your Farm or Ranch

Often called the "lender of first opportunity," FSA makes and guarantees loans to farmers who are unable to obtain financing from commercial lenders. You can use FSA loan funds to pay normal operating or family living expenses, purchase and develop farmland, implement approved conservation plans, and buy livestock and equipment.

View loan options: PDF iconnew-farmers-loans.pdf 

Grain sorghum is harvested on the Wilder Farms in Navasota, TX

Connecting with Farmland

FSA land contract guarantees are a tool to help retiring farmers get assurances on the future of their land and financial interests when selling to a new farmer or rancher – and to help new and beginning farmers enter into rent-to-own situations.

How it works: A retiring farmer and a new or historically underserved farmer or rancher enter into a contract on a piece of land being sold. The retiring farmer maintains an ownership interest in the land until the completion of the contract. The new farmer purchases interest in the land gradually over the length of the contract. FSA guarantees the payment of a land contract held between the purchaser and seller for 10 years.

Benefits to landowner: Payments on the contract are made as agreed by the landowner and purchasing beginning farmer or rancher, creating long term revenue streams. For many landowners, this can also be a good investment tool as you get a higher interest rate than other types of savings accounts. Landowners can choose between two types of assurances offered, depending on which option of contract you choose (may only choose one):

  • Prompt Payment Guarantee: If the purchaser does not make payments on the account, FSA will make payments on their behalf up to a certain point, in execution of the contract.
  • Standard Guarantee: USDA will pay 90 percent of any losses once the property is sold again.

Benefits to new farmer: New farmer has access to an affordable interest rate (not to exceed 3 percent above FSA’s direct farm ownership interest rate), they are able to purchase land on installment, and it requires a smaller down payment than conventional real estate loans.

For more info, please visit your local FSA office.

The Conservation Reserve Program Transition Incentive Program provides for the transition of expiring Conservation Reserve Program land from a retired or retiring owner or operator to a beginning, veteran, or socially disadvantaged farmer or rancher.

When available, FSA advertises inventory farmland property for purchase. Beginning farmers are given first priority to purchase these properties at the appraised value.


Financing Agricultural Businesses

For some agricultural businesses, financing needs can expand beyond your own land or equipment—including businesses that wish to further process their products (e.g. turning your cucumbers into pickles, or independent label beef), or aggregate products with others (e.g. making jams and jellies using fruits from multiple producers).

View financing options: PDF icon new-farmers-financing.pdf

Financing your business flow chart