Yesterday morning I had a meeting with Janice Ramirez at the Somerset County USDA Farm Service Agency (FSA) regarding my loan application, their requirements, and the process involved in government financing of the Swinging Bridge Farm. I’ve visited them 2 or 3 times before, but the representatives there are always patient and kind; they seem to truly want to help farmers─they have resources available that they’d like to see good people using─but as with any program governed by the people for the people, there are many rules and regulations they must abide by.
It’s been a week since I last posted with the news of the Sale Agreement for the property in New Portland. Since then I have spent every spare minute working to prepare my application for the FSA. The documentation required with the FSA loan application is extensive, and I am glad to have 7 years of farming behind me going into this.
Here is a list of the documents I need to have to hand in with the application:
- Purchase & Sales Agreement wit legal description of the property to be purchased
- 3 year financial history for my farm business
- Tax returns for the last 3 years, preferably with a Schedule F
- Creditor list
- Listing of properties owned and leased
- Verification of debts and assets
- Farm business plan
- Verification of non-farm income
- 3-5 year cash flow projections
- Balance sheet
- FSA loan application
Note: Go to the USDA’s Farm Service Agency online to read more about and the different resources, loans, and opportunities this office has available for farmers.
In addition to this documentation. the FSA also requires applicants to have participated in a Borrower Training course that teaches business management. These courses can sometimes cost the applicant several hundred dollars or more, and can hold up proceedings if you have to wait for a scheduled course.
Fortunately for me, the UME Cooperative Extension has assembled an online course that I have been able to start immediately and work through at my own pace (which is a hurried one, since time is of the essence for Runamuk). The course cost me just $50, and I am working through it with my Somerset County Extension representative, Kathy Hopkins, who was also my instructor for the Master Gardener course I took back in 2011, and whom I’m already familiar with, having previously hosted the Somerset Beekeepers out of the extension office for so many years. Score!
I am so grateful to the fine folks at the Cooperative Extension for putting this course together for people like me to utilize. They’ve saved me hundreds of dollars, and freed me from the constraints of having to travel to a distant location to sit through hours and hours of training, week after week. Instead I can watch the videos at 3 in the morning or between calls at Johnny’s, and work my way through the homework assignments quickly and efficiently.
The FSA Loan Process
Janice reviewed with me what I have so far, pointed out a few things she had questions about, and we put together a list of materials I still need to come up with in order for my application to be complete. The FSA will not accept the application until all documentation is included.
Once I submit the application, along with all of the necessary documents, the FSA agent will review it to determine Eligibility. Janice said she sees no reason why I shouldn’t be eligible, especially since there are funds set aside specifically for disadvantaged farmers, like women. This is essentially the equivalent of a pre-qualification for financing.
After that, the application gets scrutinized by a financial team at the state level to determine “Feasibility” of the proposed project. This is where my loan will be approved─or not─and it all comes down to the numbers. Does Runamuk’s current income warrant investment in real estate? Does the business’s financial history substantiate continued growth? And most importantly, does the financial plan make sense?
In which frugality pays off
I was pleased when Janice, upon reviewing my financials, noted how low my living expenses were listed at. She questioned me about it at first, almost disbelieving that the numbers could possibly be accurate, but I told her about how I’ve been keeping careful records of my expenses for the last 2 years. I have the receipts and logs to prove that we are living frugally in order to keep overhead low, and to free up money for investment in Runamuk; it was a carefully calculated strategy, and one that required much discipline and sacrifice. She seemed very impressed and remarked─not once, but twice─on how “modest” my budget is.
My goal is to have my application submitted to the FSA bright and early Monday morning, though my Borrower Training won’t be completed until Wednesday, when I have scheduled the final meeting with Kathy to review my business plan with her as required. After that it’s out of my hands and all I can do is hope and pray that my best efforts are enough to secure the Swinging Bridge Farm for Runamuk.
Thanks for following along! Check back soon for more of our story as we seek to gain a forever-farm home, and to cultivate a pollinator conservation farm in Maine!