FSA Loans for Commodity Marketing Assistance: Loan Requirements

Farm Service Agency, or FSA loans, provide some great opportunities for farmers and ranchers that need help with their farms. When you grow and sell a commodity, you can sometimes use some assistance. The bills start to add up and the prices of your commodities may go down. An FSA loan for commodity marketing allows you to get access to money to assist with your marketing efforts. This will allow you to level out your income and get through the tough times. The loan requirements for a commodity marketing assistance program are a little bit different than other loan programs. 

Commodities

The most important part of the commodity marketing assistance loan requirements is the commodity itself. You have to have some sort of a commodity to put up as collateral on the loan. The FSA will spend less time looking at you and your credit history and more time looking at the value of the commodity. If something happens and you cannot repay the loan, the commodity will be sent to the FSA for repayment. This means that your credit history is not the most important aspect of the loan as it is in other types of loans. 

Farm History

Another thing that the FSA will look at is a successful history of running your farm. They will want to see that your farm has produced enough in the past to warrant the amount of money that you are asking for. Farms typically produce similar amounts from year to year. Therefore, if your farm has produced enough over the last 10 years, there is no reason to think that it won't produce that much again in subsequent years. The history of the farm will be one of the most important things that the FSA will look at. They will want to see documents that prove exactly how much you have produced in recent years. With this information, they can make an accurate decision on whether or not to approve the loan.

Likelihood of Repayment

The FSA will also look at your ability to repay the loan without cashing in the commodity itself. They will look at your operating capital and many other financial statistics. They will want to see that you can pay back the loan based solely on the merits of your business. If you can prove to them that you will have no problem repaying the loan, they will be much more likely to approve you for the marketing loan that you need.