Capital for Beginning Farmers and Ranchers Act of 2025
The 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 and loan guarantees to qualified beginning farmers and ranchers. These loans would finance development expenditures—long-term capital investments that support start-up capacity and business growth (such as initial assets, branding, market development, bookkeeping systems, payroll, and compliance infrastructure). Loans are capped at $100,000, with repayment terms of 3 to 10 years, and an interest rate set by the Secretary at 0% to 3%. Collateral could be up to 100% of the loan value but may be reduced by the lender based on the borrower’s experience. The program must be established within two years of enactment and includes borrower training and ongoing evaluation with biennial congressional reporting. In addition to providing capital, the act emphasizes training for borrowers on bookkeeping, taxes, credit, cash flow, and risk management, delivered through existing USDA-related programs. The program also clarifies how these development loans would be treated for purposes of other farm loan authorities and reporting, and it requires regular evaluation to inform Congress about outcomes and operation.
Key Points
- 1Definition and scope of development expenditures: The loan program can fund long-term investments such as initial assets, intangible infrastructure, soil fertility improvements, branding, market development, bookkeeping systems, payroll, and compliance-related improvements.
- 2Establishment and eligibility: A pilot program to make or guarantee development loans to qualified beginning farmers and ranchers must be established within 2 years of enactment.
- 3Loan terms and limits: Each development loan may have a repayment term of 3–10 years, must be used only for development expenditures, cannot exceed $100,000, and may carry an interest rate between 0% and 3%.
- 4Collateral and repayment flexibility: Collateral up to 100% loan-to-value, with potential reductions at the lender’s discretion based on borrower experience; flexible principal repayment with at least 1% of the remaining balance due annually; annual interest payments required.
- 5Training and evaluation: Borrowers receive comprehensive training on farming/ranching management, bookkeeping, taxes, credit, cash flow, and compliance, delivered through existing USDA-related programs; the Secretary must evaluate the pilot and report biennially to Congress on outcomes.