On-Farm Loans For Youth

On-Farm Loans For Youth SPECIALTY/SERVICES Specialty/Services 5-1-21 One way for young people to find out if they really want to get into farming is to let them get into debt and then, by their own sweat, try to get out. The problem is that unless Mom and Dad help, most youngsters can't get conventional loans. Under a program run by the Farmer's Home Administration, however, youth aged 10 to 21 can borrow funds to run their own farm, or off-farm projects. They must qualify for the loan on their own merits. Parent's finances are not even considered. "The money can be used for livestock, feed, machinery and nearly anything else," says Jim Walker, a loan officer in Washington, D.C. "Some loans have been used to buy tools to open a mechanics shop, others to buy a baler or swather for setting up a custom operation, and still others to buy sewing machines to open a sewing shop." More than 1,000 "Youth Loans" were awarded in fiscal 1980, averaging about $4,900 a piece. Walker estimates that the average age of participants is around 17. "Younger applicants often do not require loans because projects are smaller, but we do get applications from all ages," he notes. Maximum payback period is seven years. Current interest rates run at about 10 %. It takes from two to six months for loan applications to go through, depending on current demand at local FmHA offices. For more information, contact: FARM SHOW Followup, Youth Loans, Production Loan Division, Farmers Home Administration, USDA, Washington, D.C. 20250 (ph 202 447-2288).

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