Capital for Beginning Farmers and Ranchers Act of 2025
The Capital for Beginning Farmers and Ranchers Act of 2025 creates a new pilot program within the USDA’s loan programs to help qualified beginning farmers and ranchers finance development expenditures—capital investments intended to strengthen a farming or ranching operation for more than one year. The goal is to shift some start-up investments from annual operating loans to longer-term, development-focused loans, addressing the early-stage capital needs that many new, diverse, or specialized farming ventures face. Under the bill, the Secretary would establish a pilot program within two years to make or guarantee development loans of up to $100,000 each, with long repayment terms (3 to 10 years), very low to moderate interest (0% to 3%), and flexible repayment that requires at least 1% of the remaining balance to be paid each year. Loans are restricted to development expenditures (as defined by the act) and are intended to be used for building assets, systems, markets, branding, bookkeeping, payroll, and compliance capabilities, among other items. Borrowers would receive comprehensive training on farming/ranching management, finances, and regulatory compliance. The program includes ongoing evaluation and biennial reporting to Congress.
Key Points
- 1Beginning farmer and rancher development loan pilot program: A new pilot under the Consolidated Farm and Rural Development Act to finance development expenditures for qualified beginning farmers and ranchers, with loans or guarantees administered by the Secretary.
- 2Definition of development expenditure: Capital investments that benefit a farming or ranching business for more than one year, including
- 3- acquisition/development of initial assets or intangible infrastructure;
- 4- soil fertility improvements, perennials, or breeding stock;
- 5- basic equipment and supplies;
- 6- branding, market access, and supplier/service relationships;
- 7- bookkeeping systems and profitability management;
- 8- payroll and compliant labor practices;
- 9- regulatory compliance (food safety, environmental, etc.);
- 10- and other items the Secretary deems appropriate.
- 11Loan terms and conditions:
- 12- Up to $100,000 per loan; term of 3–10 years; not used for non-development expenses.
- 13- Collateral up to 100% loan-to-value, with possible reductions by the lender based on borrower experience.
- 14- Interest rate between 0% and 3%; annual interest payments required.
- 15- Flexible principal repayment, but at least 1% of the remaining balance due each year.
- 16- Treated as operating loans for purposes of existing statutes and programs, and not counted toward certain other loan limits.
- 17Borrower training and support: The Secretary must provide comprehensive training on bookkeeping, taxation, credit, cash flow, profitability, risk management, and regulatory compliance, delivered through partner programs and qualified entities.
- 18Evaluation and reporting: The Secretary must continuously evaluate the pilot and submit biennial reports to the Senate Committee on Agriculture, Nutrition, and Forestry and the House Committee on Agriculture detailing operations and outcomes.
- 19Establishment deadline: The pilot program must be established no later than two years after enactment.