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NGExpert financial copywriter
Page written by Chris Godfrey. Last reviewed on April 24, 2024. Next review due October 1, 2025.
Farm grants can provide crucial financial support to farmers and organizations that operate in the US agricultural industry. Provided by Government departments, corporations, foundations and other organizations, farm grants are effectively free money. There is no need to repay the funds if you spend them where you said you would. Use your farm grant to buy agricultural land and property as well as cover other costs such as livestock, equipment, vehicles, seeds, feed and more.
Key benefits of farm grants include:
There are many types of farm grants. Award sums, qualifying criteria and selection committee objectives vary from source to source.
The Sustainable Agriculture Research and Education (SARE) Grant Program provides competitive grants for sustainable agriculture research and education projects. Supported by the National Institute of Food and Agriculture, SARE grants are available to US-based farmers, ranchers, researchers, graduate students, extension agents and other educators. Eligible projects include on-farm renewable energy, pest and weed management, no-till and conservation tillage, pollinators and small ruminants. SARE is divided into four geographical regions—North Central, Northeast, South and West—each has its own set of grant opportunities. Funding up to $250,000 may be available.
With the goal of bringing new farmers into the agricultural sector, the Beginning Farmer and Rancher Development Program provides grants to support farmers in the first ten years of their farming business. Grant awards vary by category, as do the rules of application. Awards range from $50,000 to $750,000 with an estimated total program award pot of $24 million.
The FruitGuys Community Fund (TFGCF) provides grants to US-based small farms and agricultural nonprofits. Grants are available up to $5,000 and funds can be used to improve operations. To qualify you must also be an agricultural nonprofit or the owner or operator of a farm or otherwise have legal access to the land where it is located. Your farm must have been a small to medium-sized working farm for at least one year before applying.
Funded by the Federal Government Department of Agriculture (USDA), the Renewable Energy Systems and Energy Efficiency Grant helps US farmers to purchase and install renewable energy systems or make energy-efficiency improvements to their farm. Grants of $2,500 to $1 million are available for renewable energy systems and $1,500 to $500,000 for energy efficiency projects. The USDA will provide up to 50% of your total eligible project costs.
To qualify, farms and agricultural producers must be located in rural areas with populations of 50,000 residents or fewer.
The Farmers Market Promotion Program (FMPP) funds projects that develop, coordinate and expand direct producer-to-consumer markets to help increase access to and availability of locally and regionally produced agricultural products. Grant funding ranges from $50,000 to $500,000 and varies according to the type of grant you apply for:
FMPP grants are open to all US-based and owned farms and agricultural businesses. You must provide a 25% matching fund to qualify.
The US Department of Agriculture’s Patrick Leahy Farm to School Grants are designed to help state, regional, and local organizations as they initiate, expand, and institutionalize farm to school efforts – which is a fancy way of saying ‘we connect kids to farmers’. To drive this initiative, USDA awards annual Farm to School grants to support the planning, developing, and implementing farm to school programs. Awards range from a few thousand dollars to six figure sums. See all the 2023 winners to find out more.
The Value-Added Producer Grant (VAPG) program helps agricultural producers generate new products, create and expand marketing opportunities, and increase producer income. Grants are awarded through national competition and fall into two categories: Planning Grants – up to $75,000; Working Capital Grants – up to $250,000. You must provide a 100% matching fund to receive your award.
Applications are open to independent producers (includes harvesters and steering committees), agricultural producer groups, farmer- or rancher-cooperatives, and majority-controlled producer-based business ventures. You may receive special priority for an award if you are:
If you’re an innovator in the agricultural industry, the Farm Bureau Ag Innovation Challenge may be the perfect fit for you. Open to startup farming businesses that are bringing new solutions to the many challenges faced by the US agricultural sector, the program awards $165,000 in grants to ten selected farm businesses, with the winner taking home the $50,000 major prize. Other awards range from $10,000 to $20,000 plus an extra $5,000 ‘People’s Choice’ prize.
Applicants must be Farm Bureau members to qualify for the prize-giving round. Applicants who are not Farm Bureau members can qualify by joining a state Farm Bureau of their choice.
The Food Animal Concerns Trust (FACT) provides Fund-a-Farmer Grants, which are aimed at improving farm animal welfare and supporting the expansion of humane farming practices. Grants may be secured up to $3,000 in value, with funds used for capital and operation work related to supporting the organization’s goals. Projects may include things like fencing, watering systems, access to share, cattle scratching stations and mobile animal shelters.
The Sky High Farm Grants program supports agricultural projects managed by farmers of Black, Indigenous, Latin, Asian, migrant and refugee status. Aiming to extend the existing agricultural circle by helping those farmers and groups who are often excluded from traditional farm and business funding, the program provides a limited number of microgrants per year to qualifying applicants.
The National Young Farmers Coalition offers the Young Farmer Grant Program. The program offers 75 grants, each worth $5,000, plus membership to the National Young Farmers Coalition. Recipients can use funds to cover the costs of starting, running and growing farm operations, with no additional limitations.
There are more ways than one for farmers to fund their operation. Business loans can fill the gap if your grant award is too small or if your grant application was not approved:
The most common type of commercial loan. Borrow up to $5 million. You receive a single, lump-sum cash injection and then pay it back in regular instalments over a fixed period of up to 25 years. Collateral may be required.
A business loan that functions like a high-value credit card. Farmers can withdraw as much as they want when they want from a loan facility up to the limit of their borrowing. You only pay interest on the sums you withdraw, not the while credit line. This can significantly reduce your borrowing costs. Collateral may be required.
Also known as account receivables financing. Borrow against the value of your farm’s unpaid invoices. The lender will usually provide up to 95% of the invoice value within a few days or even hours of the bill being raised. Your invoices act as security for the loan, no added collateral required.
Equipment loans use the asset you’re financing as security – so no added collateral is required. You use the equipment as you pay for it and the lender maintains a lien on the machinery. Buy tractors, harvesters, seed drills, balers and more. Once you pay the loan back, the lender releases the lien, and you own the equipment outright.
Commercial real estate loans (also known as commercial mortgages) are used to buy properties that have a business function. This would include income-producing properties such as factories, offices and farms. Although commercial real estate loans are similar to the residential mortgages used to buy homes, they differ in some key areas:
Differences between commercial and residential real estate loans
| Commercial | Residential | |
|---|---|---|
| Primary borrower | Business entity - farm | Private individual |
| Type of property | Commercial property | Private residence |
| Loan repayment period | 10 to 25 years | 15, 20 or 30 years |
| Maximum loan to value (LTV) | 65% to 85% LTV | 95% LTV |
| Interest rates | Higher than residential | Lower than commercial |
| Fees | Higher than residential | Lower than commercial |
| Pre-payment penalties | Common | Rare |
| Minimum FICO score | Usually 600+ | Can be as low as 500 |
Commercial construction loans are short-term funding instruments used to pay for building new income-producing properties or for the expansion, refurbishment or conversion of existing commercial properties. Use this type of loan to build or improve barns, production facilities, silos, cattle sheds and more. Construction loans typically pay out in instalments as each phase of the work is completed rather than all at once like a commercial mortgage. The loan is paid back when construction is complete, often by converting the debt to a less expensive commercial real estate loan.
For small and medium-sized farms, an SBA 7a loan, SBA express loan or SBA microloan may provide the financing you need:
SBA 7a business loans are backed by the US Government up to 85% of loan value and can provide up to $5million to qualifying borrowers with repayment terms as long as 25 years. SBA loans usually come with much lower interest rates and fees than other commercial lending, but meeting the SBA’s strict rules of eligibility can be tough. Farmers will typically need to have been in business for at least four years and have annual revenues over $180,000. Your personal credit score must be at least 680. Collateral may be required.
SBA express loans are a faster alternative to the standard 7a loan program. Offered by the same pool of lenders, express loans can give SMEs up to $500,000 to support their business and you will usually get a ‘yes/no’ indication within 36 hours of making your application. Note that interest rates and fees are typically higher with express loans than their 7a counterparts. Collateral may be required.
Nonprofit and community-based lenders can provide SBA Microloans to farmers that may struggle to secure standard business financing. Available up to $50,000, SBA microloans also come with more relaxed qualifying rules and can usually be secured with FICO scores as low as 500, or even with no credit score at all. Be aware that these type of business loans often require a personal guarantee that makes you personally responsible for the debt.
Working with business finance experts can make all the difference when applying for grant funding. Contact Swoop to discuss your borrowing needs, get help with your application and to compare top quality farm grants and business loans from a choice of providers. Give your farm the funding it needs to grow. Register with Swoop today.
Written by
Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.
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