USDA FSA Direct Farm Operating Loan
USDA Farm Service Agency
Up to $400,000
Working capital loans direct from USDA
Direct loans from USDA's Farm Service Agency for farmers who cannot get credit from commercial lenders. Covers annual operating expenses — seeds, fertilizer, feed, fuel, farm equipment, family living — plus refinancing short-term debt. Beginning, minority, women, and veteran farmers are priority applicants. No intermediary bank required; FSA is the lender.
- Funding type
- Loan
- Level
- Federal
- Amount range
- $1,000 – $400,000
- Realistic amount
- Most direct operating loan recipients borrow $50,000–$150,000. Beginning farmers with limited equity typically receive $…
- Deadline
- Rolling — no application deadlines. Apply any time at your local FSA county office.
- Status
- active
- States
- Nationwide
- Payment model
- loan
Who qualifies
- Must be a U.S. citizen, non-citizen national, or qualified alien who has legal capacity to incur the loan obligation
- Must be unable to obtain sufficient credit from commercial lenders at reasonable rates and terms
- Must have farming experience or education — at least 1 crop year of farm operating and management experience within the past 10 years
- Cannot have caused a loss to FSA through a prior debt write-down
- Must demonstrate repayment ability from farm income, off-farm income, or a combination
- Beginning farmers (has not operated a farm for more than 10 years) receive loan limits lifted to $400K and priority scoring
- Must be the operator of a family farm after the loan is made
- Cannot have outstanding federal judgments or delinquencies on federal debt (except IRS payment plans)
- Socially disadvantaged farmers (women, minority, tribal) receive priority processing
Hard requirements
- US citizenship required
What it covers
Eligible expenses
- Annual farm operating costs: seeds, fertilizer, pesticides, herbicides, soil amendments
- Farm equipment purchase or repair (machinery, tractors, implements)
- Feed, seed, and livestock purchase
- Fuel and utilities for farm operations
- Family living expenses of the operator household
- Land rent or leasehold costs
- Crop insurance premiums
- Refinancing short-term non-real-estate debt on reasonable terms
- Minor improvements and repairs to farm buildings directly related to operations
Ineligible expenses
- Purchase of real estate or land (covered by Farm Ownership Loan program)
- Construction of major farm buildings or improvements (use Farm Ownership Loans)
- Payment of penalties, fines, or judgments
- Refinancing FSA debts under normal conditions
- Non-farm business expenses
- Gambling or illegal activities
How to apply
-
1
Contact your local FSA county office
Find your county FSA office at farmers.gov/contact/fsa-service-center. Schedule a meeting to discuss your operation, credit history, and loan need. The loan officer will determine if you meet the 'unable to obtain commercial credit' requirement and explain the specific forms needed.
~4 hrs
-
2
Gather financial records
Assemble 3 years of farm income tax returns or farm financial statements, a current balance sheet (assets and liabilities), a cash flow projection for the loan period, proof of farming experience, and documentation of any other income sources. FSA will request a credit report.
~4 hrs
-
3
Complete FSA loan application forms
Your FSA loan officer will provide form FSA-2001 (Request for Direct Loan Assistance) plus supplemental forms based on your situation. These cover loan purpose, collateral description, farm history, and repayment plan. The loan officer assists with completion — this is an in-person guided process.
~4 hrs
-
4
Loan processing and approval
FSA underwrites the loan — reviewing credit history, repayment ability, and collateral. Typical processing is 30–60 days for complete applications. FSA may require a lien on farm equipment, livestock, or crops as collateral. Farm ownership loan decisions also require appraisal.
~4 hrs
-
5
Receive funds and meet annual reporting
Approved borrowers receive a promissory note and security agreement. Funds disbursed directly to borrower or to vendor/supplier. Annual review required — FSA loan officers monitor repayment progress and farm operations. Borrowers are also encouraged to apply for guaranteed loans from commercial lenders as their credit improves.
~4 hrs
Industry & certifications
NAICS codes: 111110, 111120, 111130, 112111, 112112, 112120, 112210, 112310
FSA loan officers are required to help you apply — this is not a competitive grant process. If your operation has any cash flow projection showing repayment, you can qualify.
Deadline & timing
Rolling applications accepted year-round through local FSA county offices. Processing time is typically 30–60 days for complete applications. Funding is subject to annual congressional appropriations.
Programs that stack well
- Usda Fsa Beginning Farmer Microloans
- USDA Beginning Farmer and Rancher Development Program (BFRDP)
- USDA Rural Energy for America Program (REAP)
- USDA Value-Added Producer Grant (VAPG)
Related programs
Last reviewed 2026. GrantCompass is an independent funding-discovery tool and is not affiliated with any government agency. Always confirm details on the official program page.