Capital for Beginning Farmers and Ranchers Act of 2025
Capital for Beginning Farmers and Ranchers Act of 2025 would create a new pilot program under the Consolidated Farm and Rural Development Act to provide development loans or loan guarantees specifically for qualified beginning farmers and ranchers. The intent is to fund start-up-style, longer-term capital expenditures that support the growth and resilience of a farming operation—beyond what typical operating loans cover. Loans would be limited to $100,000, carry a 3–10 year payback period, offer low interest (0–3%), and require flexible annual principal payments with at least 1% of the remaining balance due each year. The program would also require borrower training on financial management, compliance, and risk management, and include ongoing evaluation with biennial reporting to Congress. The loans are treated as operating loans for some purposes but are targeted to development needs rather than routine operating needs, with some potential collateral flexibility based on borrower experience. In short, the bill aims to address a gap in early-stage, multi-year investments for new farmers by providing affordable, development-focused financing tied to capacity-building and technical training, under a formal USDA pilot.
Key Points
- 1Creation of a Beginning Farmer and Rancher Development Loan Pilot Program (SEC. 320) within the Consolidated Farm and Rural Development Act to finance development expenditures for qualified beginning farmers and ranchers.
- 2Definition of “development expenditure” (development expenditures that benefit a farming or ranching business for more than one year) includes: initial assets and intangible infrastructure, soil/stock improvements, building a business foundation (branding, supplier relationships, market access), bookkeeping systems, payroll and compliant labor practices, regulatory compliance, and other items the Secretary deems appropriate.
- 3Loan terms: up to $100,000 per loan, 3–10 year repayment term, interest rate 0–3%, annual interest payments, and a flexible principal repayment schedule requiring at least 1% of the remaining balance to be paid annually; collateral can be reduced based on borrower experience.
- 4Program status and treatment: loans may be made or guaranteed; not counted toward certain operating loan limits; treated for some purposes as operating loans under other CFR/Agency provisions.
- 5Borrower training: the Secretary must provide comprehensive training and support on bookkeeping, taxation, credit, regulatory compliance, cash flow, profitability, and risk management, delivered through existing related programs and entities.
- 6Evaluation and reporting: the Secretary must continuously evaluate the pilot and biennially report to Congress on operations and outcomes.