What is the Farm Service Agency (FSA) Loan Guarantee Program?
The FSA loan guarantee program is a contract between a producers credit provider (lender) and the Farm Service Agency. The program guarantees the lender will recoup 90% of any loss incurred on a guaranteed loan. The program offers a lender an incentive to extend credit to producers who for various reasons, i.e. collateral deficiency, cash flow problems, do not qualify or represent substantial risk under the bank’s normal underwriting criteria. Producer Targeted Loan Program The targeted loan guarantee program offers a special 1 billion dollar allocation of funds to guarantee producers operating loans. It also offers paperwork and documentation relief to lenders submitting applications to FSA for guarantee. How To Apply The loan guarantee program is strictly an agreement between the lending institution and FSA. Producers that feel a guarantee will enhance their ability to maintain their existing credit relationship should encourage their lender to submit their loan application to FSA fo
