February 2008
The U.S. Department of Agriculture's Farm Service Agency (FSA) makes operating loans of up to $5,000 to eligible individual rural youths age 10 through 20 to finance income-producing, agriculture-related projects. The project must be of modest size, educational, and initiated, developed and carried out by rural youths participating in 4-H clubs, FFA or a similar organization.
The project must be an organized and supervised program of work. It must be planned and operated with the assistance of the organization advisor, produce sufficient income to repay the loan, and provide the youth with practical business and educational experience in agriculture-related skills.
To qualify for a loan, the applicant must:
- comply with FSA's general eligibility requirements;
- reside in a rural area, city or town with a population of 50,000 or fewer people; and
- conduct a modest income-producing project in a supervised program of work.
These loans can finance many kinds of income-producing agricultural projects. The loan fund may be used to:
- buy livestock, seed, equipment and supplies;
- buy, rent or repair needed tools and equipment; and
- pay operating expenses for the project.
To apply, the applicant must submit completed plans and budgets signed by the project advisor and parent or guardian along with the FSA application for loan assistance. These loans:
- have a maximum loan amount of $5,000 (total principal balance owed at any one time cannot exceed this amount);
- have an interest rate which is determined periodically, based on the cost of money to the federal government,
- after the loan is made, the interest rate for that loan will not change;
- will be secured, in addition to promissory notes, by liens on the products produced for sale and on chattel property, including livestock, equipment and fixtures purchased with loan funds; and
- have a repayment schedule which varies depending on the type of project for which the loan is made,
- For example, if it involves raising livestock or crops, the loan is paid when the animals or produce are normally sold.
To apply or find out more, visit your local USDA Service Center. A listing of centers, and more information about youth and other loan programs, are available on the FSA website at http://www.fsa.usda.gov. USDA Service Center offices are also usually listed in telephone directories under "U.S. Department of Agriculture."
The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or part of an individual's income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD). To file a complaint of Discrimination, write to USDA, Director, Office of Civil Rights, 1400 Independence Avenue, SW., Washington, DC 20250-9410, or call (800) 795-3272 (voice) or (202) 720-6382 (TDD). USDA is an equal opportunity provider and employer.
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