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FSA makes loans
to individual rural youths to establish and operate income-producing
projects of modest size in connection with their participation
in 4-H clubs, Future Farmers of America, and similar organizations.
Each project must
be part of an organized and supervised program of work. The
project must be planned and operated with the help of the
organization adviser, produce sufficient income to repay the
loan, and provide the youth with practical business and educational
experience.
Each year, many
young entrepreneurs take advantage of these loans and gain
valuable business experience in the process.
Who may borrow?
To qualify for
a loan, an applicant must:
-
be a citizen
of the United States (or a permanent resident), which
includes Puerto Rico, the Virgin Islands, Guam, American
Samoa, and the Commonwealth of the Northern Mariana Islands;
-
be between
10 and 20 years old;
-
live in a
town of less than 10,000 people;
-
be unable
to obtain a loan from other sources; and
-
conduct a
modest income-producing project in a supervised program
of work, as outlined above.
Applicants must
also be capable of planning, managing, and operating the project
under guidance and assistance from a project adviser. The
project adviser must recommend the project and the loan, and
agree to provide adequate supervision.
What are some
possible projects?
These loans may
be used to finance nearly any kind of income-producing project.
Some common projects include livestock and crop production,
lawn and garden services, repair shops, and roadside stands.
What is the
maximum loan amount?
The maximum
amount for FSA youth loans is $5000.
What may loans
be used for?
Loan recipients
may use the money to buy livestock, equipment, and supplies;
buy, rent, or repair needed tools and equipment; and pay operating
expenses for running the project.
What size
project can be financed?
Only projects
of modest size can be financed. A modest project is limited
in physical size, capital requirements, and overall objectives.
What security
is required?
Applicants must
sign a promissory note and be responsible for repaying the
loan. In some cases, a cosigner may be required. Loan collateral
normally consists of crops produced for sale, livestock, equipment,
and other items purchased with loan funds.
What are the
repayment terms?
The repayment
schedule will be worked out with FSA. Payments will be tailored
to the type of project for which the loan was made. For example,
if the loan is to raise livestock or crops, it would normally
be paid when the produce/livestock is sold. If the project
is a repair shop or some other service operation, the loan
can be paid from the weekly or monthly earnings.
The U.S. Department of
Agriculture (USDA) prohibits discrimination in all its
programs and activities on the basis of race, color,
national origin, gender, religion, age, disability,
political beliefs, sexual orientation, and marital or
family status. (Not all prohibited bases apply to all
programs.) Persons with disabilities who require alternative
means for communication of program information (braille,
large print, audiotape, etc.) should contact USDA’s
TARGET Center at 202-720-2600 (voice and TDD).
To file a complaint of discrimination, write USDA, Director,
Office of Civil Rights, Room 326-W, Whitten Building,
14th and Independence Avenue, SW, Washington, D.C.,
20250-9410, or call (202) 720-5964 (voice or TDD).
USDA is an equal opportunity provider and employer.
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