If you can find a way to get by on gifts and personal resources when your business is brand new, that’s great. If you need to track down additional financing though, here are a few of the more traditional avenues to try. For more information on these and a wide array of other tools, as well as information on when certain types of funding might be best suited to your operation, read Module 6: Financing of Planning for On-Farm Success. Rural Advancement Foundation International has also published The Farmer’s Guide to Agricultural Credit which contains useful information to help understand the loan process.
A point of clarity: grants are funds that do not need to be repaid while loans must be paid back. Cost-share programs typically involve grant funding that you match with your own personal funds.
- Value-Added Producer Grants: From USDA Rural Development to cover the costs of developing and marketing new value-added products
- Rural Energy for America Program (REAP): From USDA Rural Development to pay for on-farm alternative energy projects like solar, wind, and other power sources
- Western Sustainable Agriculture Research & Education (SARE): Offers grants for on-farm research and education projects
- Growth Through Agriculture: From the Montana Department of Agriculture, this program funds education, marketing, planning, and other strategies to support new and innovative ag products
- Specialty Crop Block Grants: From the Montana Department of Agriculture for projects that enhance the competitiveness of specialty crops (i.e. fruits and vegetables, peas, lentils, horticulture and nursery crops, including floriculture)
- Rural Employment Opportunities: Offers low-income workers who’ve done seasonal farm, ranch or other agricultural work within the past two years funding for on-the-job training (i.e. wages), tuition, and other services. (FAQ)
- Red Ants Pants Foundation: Offers grant to projects that develop and expand leadership roles for women, preserve and support working family farms and ranches, and enrich and promote rural communities
- Ag Organizations: From time to time, ag organizations offer grant programs. Check with yours to see if funding is available
- Environmental Quality Incentive Program (EQIP): From the Natural Resources Conservation Service, with cost-share opportunities for a wide array of conservation practices
- Defenders of Wildlife: Offers an electric fencing cost share program that matches investments up to $500 ($1,000 total project cost)
- Kiva: The Community Food & Agriculture Coalition became a Kiva trustee in 2016, enabling them to endorse 0% interest, zero-fee loans up to $10,000 to their members. These loans are then crowdfunded, similar to Kickstarter. More information on being endorsed by CFAC is available on their Kiva site.
- Farm Service Agency: USDA-FSA offers direct and guaranteed loans (i.e. directly to you or guaranteeing your loan with a conventional lender) for farm ownership, operating costs, emergencies, and conservation. Targeted funds are available for beginning and underserved farmers and ranchers as well as micro-loans designed to streamline the application process for smaller loan amounts. The USDA-FSA publishes a guide to help you navigate their loan process. The Farmers’ Legal Action Group has published an excellent guide for the Microloan Program. For one-on-one technical assistance applying for Farm Service Agency support in Western and Southwest Montana, visit CFAC’s FSA Technical Assistance page.
- Rural Assistance Loans: From the Montana Department of Agriculture for purchase of land, improvements, operating expenses, or other property
- Beginning Farm & Ranch Loans: From the Montana Department of Agriculture for land purchase
- Montana Livestock Ag Credit, Inc.: Offers financing to livestock producers
- Community Development Corporations and Community Development Financial Institutions: Organizations around the state which often offer high-risk loans to local small businesses
- Local banks: Oftentimes local, community-based lenders will have a good ag or small business lending department. Wells Fargo has a large ag lending department as well
- The Montana Conservation Menu: This database includes information and links to many programs (some listed above) that promote conservation practices in an agriculture operation. Search tools help users to find the most appropriate program for their goals.