Emergency FSA Loans: Advantages

If you own a farm in a rural area, you are probably familiar with FSA loans. While you may know of them, you might not have considered how they could benefit you. In the case of a natural disaster or drought, the government may provide emergency FSA loans to farmers in your area.

Help in Desperate Times

For a farmer, a natural disaster is one of the worst things that could possibly happen. Your entire crop could be wiped out in a very short period of time. With agricultural loans, you can borrow money to cover your losses. This is similar to obtaining a small business loan except it is specifically for farms. They will pay to replace property that was damaged, lost production costs, family living expenses and refinance your debts.

Low Interest

One of the biggest detriments of a new loan is the amount of interest that you pay. If the interest is too high, you might be convinced that the loan is not in your best interest. With emergency FSA loans, you will pay a low annual rate that is very reasonable and allows quick repayments.

Loan Requirements

Another great thing about emergency FSA loans is that the requirements are different from a normal loan. Most of the requirements can be met by any farmer as long as they are willing to work with the government. You have to own land in an area that was officially designated as a disaster area. Also, you will need to provide a small percentage of lost crops along with an acceptable credit history. Your farm has to keep records of everything so that everything can be well documented. Then you have to develop a business plan with the help of the FSA and participate in a financial management training program and you will also be required to get crop insurance.

Long Terms

The loans are not designed to be short-term repayments. While each loan is different, you can set them up as you need to repay them. On non-real estate loans, the term is generally 1-7 years. This can include both crops and livestock. You can set up real estate loans with 30 to 40 year repayment terms under special circumstances. The terms are going to be different for each situation. As long as you are willing to work with them and obey the rules, they will find a program that fits your needs.