Ask the Expert: A Farm Operating Loan Q&A with Jack Carlile

In this Ask the Expert, Jack Carlile, Farm Loan Manager for the USDA Farm Service Agency (FSA), answers questions about farm operating loans and when producers should apply in order to secure funds for the current crop year.

As the Farm Loan Manager for the Cherokee County Service Center, Jack is responsible for managing the loan making and loan servicing activities for five counties in northeast Oklahoma.  His office provides services for over 650 farm loan customers. Jack was raised on a cross bred cow/calf operation that his grandparents started. Over the years, each generation has added to the operation by purchasing additional pasture. The operation also grows and bales their own hay. Jack’s agriculture background and degree in agriculture economics from Oklahoma State University help him better understand the financing needs of his producers.

Person dumping feed from bucket into trough in which cattle are eating from
Jack and his farm loan team help producers apply for farm operating and ownership loans to start or grow their operations.

Who can apply for FSA Farm Loans?

Anyone can apply for FSA’s loan programs. Applications will be considered on basic eligibility requirements. To apply for a loan, you must meet the following general eligibility requirements including:

  • Be a U.S. citizen or qualified alien.
  • Operator of a family farm or ranch.
  • Have a satisfactory credit history.
  • Unable to obtain credit elsewhere at reasonable rates and terms to meet actual needs.
  • Not be delinquent on any federal debts.

What can I purchase with operating loans?

Farm Operating Loans are traditionally used for purchasing capital items such as farm machinery, equipment, or livestock.  Loan funds can also be used to help pay typical operating expenses for farming and ranching operations.

For example, a rancher may use an operating loan to purchase forage for his cattle to feed them through the winter or a row crop producer may use an operating loan for paying for inputs like seed or fertilizer. 

What is the maximum loan amount and terms?

The maximum loan amount for a Direct Farm Operating Loan is $400,000.  Direct loans are made and serviced by FSA.

Producers can also apply for Guaranteed Operating Loans that are made by your commercial lender, and guaranteed against loss by FSA. The maximum loan amount for a Guaranteed Farm Operating Loan is $1,825,000. Loan terms for operating loans range from one to seven years.

How do I apply?

If you’re interested in applying for a farm loan, you can pick up an application by visiting your local FSA office. Visit farmers.gov to find the USDA Service Center nearest you. 

When applying for a loan, you will need a business plan, which must include:

  • Your mission, vision, and goals for your farm or ranch.
  • Your current assets and liabilities.
  • Marketing Plan (what your operation will produce and where you will market and sell your products.)
  • Whether the amount of income your operation generates will be enough to pay your business and family living expenses.

When should I apply for an operating loan?

I would recommend beginning the application process a few months in advance of needing the funds to allow time for the request to be processed, and for any necessary security checks and searches to be completed.  That allows time for the funds to be available for your use when most needed. 

Where can I find more information

To learn more about FSA loans visit farmers.gov/loans or fsa.usda.gov/farmloans.  Fact sheets and application packages are also available at your USDA Service Center. To learn more about other types of FSA loans or to find the right loan for your operation, use the Farm Loan Discovery Tool by visiting farmers.gov/loans/farm-loan-discovery-tool.

USDA Service Centers are open for business by phone appointment only, and field work will continue with appropriate social distancing. While our program delivery staff will continue to come into the office, they will be working with producers by phone and using online tools whenever possible. All Service Center visitors wishing to conduct business with the FSA, NRCS, or any other Service Center agency are required to call their Service Center to schedule a phone appointment. More information can be found at farmers.gov/coronavirus

Cassie Bable is a public affairs specialist with USDA. She can be reached by email at cassie.bable@usda.gov.