Small Farm Loans

Most Farms Aren’t as Large as You Think

Oftentimes, when we think about farms we think about large, rolling plains and hundreds of acres of crops or livestock that produce the food that we eat. We envision cowboys driving cattle, children picking apples and berries, and communities gathering together to help each other in the high harvest.  It is largely nostalgic, as agriculture has shaped this country into what it is today, and is an integral part of the American fabric.

It is not unusual for a farm to be passed down from generation to generation, as these men and women devote their lives to their land, giving all of themselves to put food on tables across the country, including their own.

Their children are often in 4-H and other national organizations that help inspire and maintain their interest in farming life and techniques including planting, harvesting, and animal husbandry. These are the large farms that we think of when discussing farming, but there are fewer of these than you would think.

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What constitutes a small farm and how do people get small farm loans?

Officially, according to the USDA, a small farmer is defined as someone who sells between $1,000 and $50,000 per year in agricultural products. These small, family operations, make up approximately 99 percent of the U.S. farms, and they account for 89 percent of the agricultural production in this country.

Nearly half of the country’s farmland is used solely for these types of farms, so there are several small farm loan options available to them.

Small farms can be as little as a backyard harvest that is sold at a local farmer’s market. These farmers are usually hobbyists, who have just dipped their toes in the water of selling their goods. They may raise chickens, have a small orchard, harvest vegetables, sell goat’s milk, or even keep bees.

Steps To Start A Small Farm

There are several steps a person can take to start a small farm, and it can be as small as tomato plants in the backyard! Though that would technically be considered a micro farm, it’s a great first step to growing into a small farm and eventually getting your small farm loans.

The first thing you would need to do before starting your farm is read, read, and read some more. Before you put a plant in the ground or a bee in the hive, you should learn every last thing you can about the craft.

Check out books from your library, subscribe to farming publications, research on the internet, and utilize resources like 4-H (a national organization) in order to gain the knowledge you will need to help you start your farm. These resources will also help you learn the ins and outs of small farm loans, and what they can do to help you break ground on your own property.   

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What are they types of things that you should learn?

Depending on what you are farming you are going into it may mean figuring out what crops work best in the area, which soils and fertilizers will provide the best nutrients, feeding schedules for livestock, rules and regulations for livestock in your area. Of course some learning will be done by trial and error, but it is best to absorb everything you can before planting that first seed.

Have A Business Plan

From there, you will need to write a business plan and design your farm. You will have to develop a plan that will be specific to your small business in order to help you get and small farm loans.

The fun part is designing your small farm, and this kind of information factors into small farm loans too, so it is also important. You can begin by planning out whatever agricultural elements you will put in.

Are you growing berries or wheat? Corn or peppers? You will need to decide in order to factor in your field space. Do you want to have chickens, cows, or goats? You will need to weigh your options to make the most of pastures and to determine what kind of outbuildings and shelters you need for livestock.  


From here, you will need to decide how much acreage you need for your small farm and it could be as little as an acre or two. No matter what size lot you decide you would like to purchase, you will need to consider things like sunlight, potential pastures, and soil quality (it is a good idea to have soil tested prior to purchase).

If you are starting from scratch you may want to purchase land that already exists as a farm. These properties oftentimes already have the outbuildings on them and designated fields and pastures. Small farm loans are available for both pre-existing farmland, as well as new farmland, you will just need to check with your financer on rates.

Small Farm Loan Financing

Next you will need to get your business rolling. You probably won’t have all the financing you need to begin your small farm on the scale that you would like. This is where small farm loans come in.  

Small farm loans are the only monies allocated for a person to get started in a small-scale farm. These can be received through the USDA Farm Service Agency, Farm Credit, or a local bank.

There are small farm loans even targeted towards young and beginning farmers. Are you an established farmer? There are some programs that offer subsidized equipment, organic certification assistance, etc. for you.

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Business License

Once you get your small farm loans and financing in place, you will need to establish your business licenses for your small farm. Be sure to check with both your local and state laws to make sure you are meeting all of their requirements.

But you will likely need to register your business name, purchase a business license, acquire an employer identification number, and get liability insurance (particularly for your product).

Though it should be in your business plan, you will need to set up finances for your small farm as well. Work with an accountant to make sure you have all your bases covered, so you can begin to reap the rewards of your harvests as quickly as possible. Depending on your situation, they will help you decide if a sole proprietorship, LLC, or perhaps another structure will work best for you.

Get Started

Once all of the financing, small farm loans, business licenses, and plans are in place, you can break ground! Now comes the difficult, but rewarding task of farming. Remember, it just takes $1,000 in sales to officially be considered a small farm by the USDA, and farmers are the backbone of the United States. They are fundamental to the economy and their products are consumed from shore to shore as well as exports all over the globe.

So whether you are just planning on selling eggs to your neighbors, honey at your local farmer’s market, or become a supplier for a regional CSA (community-supported Agriculture) your small farm makes a big difference not only to your community but to our economy. Remember that small farms account for over 80 percent of our agricultural output, ensuring that small farms make a big impact at home and overseas.

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