What is the RFA Pilot Agricultural Microloan Program?

The Pilot Agricultural Microloan program is an initiative by the Rural Finance Authority and the State of Minnesota to assist new and established farmers. The program’s focus is to assist non-traditional farmers in the transition from their current situation to one where operators qualify for traditional avenues of agricultural credit.

What are the key qualifications and terms for the microloan?

Applicants can access up to $20,000 per operation, or 70% of annual produce value, whichever is less. Interest rate will be negotiated with the intermediary lender, but will be no higher than 10%. Payback terms are dependent on the use of funds, but will be no more than six years. Other common fees will also be negotiated with the intermediary lender. Applicants will also have to:

  • be an individual who is a resident of Minnesota,
  • be a current farmer or potential farmer, growing specialty crops and/or eligible livestock,
  • have a documented business plan, including viable cashflow projection and marketing plan, and
  • be from a Protected Group as defined in Minnesota Statute 43A.02; subd. 33, or a Qualified Non-Citizen as defined in Mn Statute 256B.06, subd 4, par (b).

How can a farmer use the funds?

Loan funds may be used by the borrower for working capital needs (annual inputs such as seed, feed, and other common farm expenses), small machinery and/or equipment purchases, and other short-term farm purchases necessary for the farm. Loan funds cannot be used to buy land, purchase cooperative stock, or refinance current debt obligations.

What is the function of the intermediary lender with the Pilot Agricultural Microloan Program?

The intermediary lender will serve as lending agent and local support person for the farmer.

Who can be an intermediary lender with the program?

Any non-profit or for-profit entity may serve as an intermediary with the program, provided they:

  • are a business, non-profit, or other entity in good standing with the state of Minnesota,
  • have a working relationship with a qualified applicant,
  • can properly service the loan, and
  • have successfully completed an intermediary application and agreement with the Rural Finance Authority.

Who do I contact for more information on the program?

Minnesota Rural Finance Authority
625 Robert St North
St. Paul, MN 55155-2538
651-201-6004, RFA.Loans@state.mn.us