2025 marks the 25th anniversary of USDA’s popular Farm Storage Facility Loan program. Through the program, USDA’s Farm Service Agency (FSA) provides low-interest financing to producers who want to build or upgrade their commodity storage facilities or purchase eligible handling equipment. In this Ask the Expert, Michael Sherman explains how producers can use this program to finance eligible facilities and equipment while keeping their capital on-hand to use for any unexpected expenses.
Michael is the Outreach Specialist for FSA in Pennsylvania. He’s worked for USDA for 23 years and previously worked as a County Executive Director in Lycoming County, which has a high volume of producers using the FSFL program. Michael spends his time off working on his registered Black Hereford cow/calf operation.
What is the Farm Storage Facility Loan Program?
FSFLs are designed to provide low-interest financing for agricultural producers looking to build, expand or replace their commodity storage and handling facilities and equipment.
Nationwide, FSFLs have been used by producers to finance over 40,000 equipment purchases since the program started in 2000.
What commodities are eligible?
Eligible commodities include grains, oilseeds, peanuts, pulse crops, hay, hemp, honey, renewable biomass commodities, fruits and vegetables, floriculture, hops, maple sap, maple syrup, milk, cheese, yogurt, butter, eggs, meat/poultry (unprocessed), rye and aquaculture.
What kind of equipment can I finance with a Farm Storage Facility Loan?
You can finance equipment that is required for the transportation, handling or storage of eligible commodity production. Cold storage and controlled atmosphere facilities are also eligible.
A detailed post-harvest assessment of your operation will identify equipment needs that can be financed to improve the marketability of your crop.
As technological advancements in agriculture evolve, so does the expansive list of eligible equipment. Be sure to contact your FSA county office to determine if the equipment you need can be incorporated into the program’s growing list of eligible equipment.
Is used equipment eligible?
Yes. Used and new equipment are eligible.
How can producers benefit from a Farm Storage Facility Loan?
FSFLs allow producers to keep their capital on hand to navigate challenges experienced in their production model rather than dedicating the funds strictly to a single purchase at a specific moment in time. This increased financial flexibility allows producers to invest elsewhere in their operation.
Below are two examples of how producers in Lycoming County used these loans to finance multiple pieces of equipment.
Scott Munro, a third-generation farmer has used five FSFLs to expand his corn, soybean and wheat operation. He used the loans to address critical infrastructure needs including multiple grain bins, a dryer, scales, and a grain leg allowing for enhanced commodity marketing and distribution.
Another producer, Harold London, used FSFLs to expand and modernize his beef cattle operation near Williamsport, Pennsylvania. He used the program to construct a hay storage facility, purchase a skid steer for commodity handling, and to build a stabilization pad for ag bag storage that provides convenient access to his corn silage year-round.
What are the loan terms?
Loan terms vary depending on the loan amount:
- Loans under $100,000 qualify for 3, 5, or 7-year terms
- Loans under $250,000 qualify for terms up to 10 years
- Loans under $500,000 can extend to 12 years
Applicants are required to pay a minimum down payment of 15% to the builder/contractor/supplier.
Payments are made in annual installments which begin one year after the date of loan closing.
Are there any other eligibility requirements for loan approval?
Satisfactory credit history, sufficient downpayment funds on hand, and future repayment ability are all key for loan approval. Additionally, applicants must not be delinquent on federal debt, be in compliance with environmental laws, and must provide proof of insurance for the FSFL collateral including crop insurance for the FSFL commodities.
Is there assistance for beginning farmers?
Beginning farmers often use FSFL Microloans, which have a maximum loan amount of $50,000. Microloans focus on the financing needs of small, beginning, niche and non-traditional farm operations. The minimum down payment is 5% and producers can self-certify their storage need, eliminating the three years of production history required for larger loan amounts.
How do I apply? Is there an application deadline?
You can submit your application at your FSA county office. Although there is no specific deadline, it is best to contact the office as soon as possible to receive approval for the pending purchase. Please remember you must “apply before you buy” to align with program policy and procedure.
Is there an application fee?
Applicants are charged a $100 nonrefundable fee per borrower to apply for each loan. This fee is used to cover credit reports, lien searches and required filings associated with your loan.
Where can I find more information?
For more information, visit the FSFL webpage, view the fact sheet, or contact your FSA County Office.
Michael Sherman is the Outreach Specialist for FSA in Pennsylvania. He can be reached at michael.sherman@usda.gov.
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