USDA/FSA loans.....can't believe how hard to qualify

[Huntet02]

Wasn't sure which board to put this on-- desperate for tips.
IM in Kansas and the USDA/ FSA Micro loans here arent worth the paper printed on; i don't believe these folks want to help anyone.
Wanted to borrow $5K for cattle chute/better panels and see how the loan worked. So after filling out 10pages yest for Micro-loan Today they tell us we have to meet a test of credit AND have a bank denial letter in order to qualify. SAYYY WHAT? My bank will loan me $ and I've worked hard for my good credit but at 9% interest (just did it when I bought 1cow) i don't want to waste that much $. Loan Rep from FSA told me yest $5K would be $1000/yr for 7yrs at 3.75% what a tease! But today after she talked to her Mgr we gotta jump through 'idiot hoops' :deadhorse: to qualify. We tried applying 3 yrs ago and i forgot why we gave up. I work for the Fed Gov guess i should have known ..... :roll:

How is a small rancher supposed to get approved for this program?

My loan Reps exact words;
had forgotten that you have to meet the test of credit for micro-loans just like you do our regular direct loans. Basically, FSA cannot compete with commercial lenders. So if your bank is willing to make you the loan than you would not be eligible for an FSA loan. If you talk to you bank and they are willing to provide a "denial letter" then FSA could look at your loan application. I apologize that I did not discuss this with you yesterday, I was just reminded by my manager that test of credit is required for the micro-loan program also.

LIke to know how folks successfully use this program.
Thank you kindly

 

[circlebllc]

We had a USDA loan. We soon got tired of the hoops and attitudes. We moved back to a bank. Paid off the loan and now keep it for emergencies. Nice to have $ with only a phone call, can't do that USDA.

 

[Huntet02]

Yes-- i agree with you just woulda been nice to have that 3.75% . Can you recommend a bank, I've got a call now into Ag Direct will see what their rate is. My Awesome Credit Union will loan me anything but wanted better rates than 9%

 

[Angus86]

I hear you. I tried to get one to buy property and the guy I had to go through barely spoke English. I dropped it about half way through from pure frustration not understanding this guy.

 

[Caustic Burno]

"The most terrifying words in the English language are: I'm from the government and I'm here to help. "
Ronald Reagan

 

[circlebllc]

Local small banks are usually very easy to work with. Some require a good ole boy connection, most are good. Make a drive and talk to loan agents. Don't over look the smallest banks. Of course, the best loan is none at all. Start very small and grow it.

 

[JMER1533]

I agree on the small banks. I was at a customer appreciation dinner last year at a breeders and was talking to an older gentleman in his 70s. Said he had a few hundred acres, ran some cattle pretty much all his life, looked like he ran cattle, talked like he ran cattle...you get the picture. Found out after the dinner was over the guy was owner of a small local chain of banks. He said to call him if I ever needed financing. So you never know, especially out in the country.

 

[TexasBred]

Wasn't sure which board to put this on-- desperate for tips.
IM in Kansas and the USDA/ FSA Micro loans here arent worth the paper printed on; i don't believe these folks want to help anyone.
Wanted to borrow $5K for cattle chute/better panels and see how the loan worked. So after filling out 10pages yest for Micro-loan Today they tell us we have to meet a test of credit AND have a bank denial letter in order to qualify. SAYYY WHAT? My bank will loan me $ and I've worked hard for my good credit but at 9% interest (just did it when I bought 1cow) i don't want to waste that much $. Loan Rep from FSA told me yest $5K would be $1000/yr for 7yrs at 3.75% what a tease! But today after she talked to her Mgr we gotta jump through 'idiot hoops' :deadhorse: to qualify. We tried applying 3 yrs ago and i forgot why we gave up. I work for the Fed Gov guess i should have known ..... :roll:

How is a small rancher supposed to get approved for this program?

My loan Reps exact words;
had forgotten that you have to meet the test of credit for micro-loans just like you do our regular direct loans. Basically, FSA cannot compete with commercial lenders. So if your bank is willing to make you the loan than you would not be eligible for an FSA loan. If you talk to you bank and they are willing to provide a "denial letter" then FSA could look at your loan application. I apologize that I did not discuss this with you yesterday, I was just reminded by my manager that test of credit is required for the micro-loan program also.

LIke to know how folks successfully use this program.
Thank you kindly

Nothing new here as it's been this way for ages. Had to get turned down by conventional lenders first. Farmers Home Administration used to do the same thing.

 

[frank boucher]

Might try Farm Credit Service,they do small line of credit loans,probably in the 5% range?

 

[Beefeater]

Bank letter is all about the wording. Any lender worth their salt can put together a brief letter indicating they cannot assist you and do not need to indicate their rates / terms... Talk to your regular banker and tell them what you need. FSA office is just looking to make a check mark on their list.

Sometimes the local FSA office is lazy. However, more often than not it's coming from much higher up. You'd be schocked by how many desk jockeys in DC who have never spent time in a rural area are making the decisions...

 

[Named'em Tamed'em]

Yes-- i agree with you just woulda been nice to have that 3.75% . Can you recommend a bank, I've got a call now into Ag Direct will see what their rate is. My Awesome Credit Union will loan me anything but wanted better rates than 9%

I purchased my track loader with ag direct, saved me 3% over Case credit. Saved 3% on sales tax buying it in Idaho instead of Washington also. I had never heard of Ag direct until then.