The right support and funding can transform any venture. Whether your business works with livestock, commercial horticulture and crops, or food processing and forestry products, there are loans and grants designed to fit the unique needs of your Missouri agriculture business.
Ag loan and grant basics
Like any entrepreneur, producers can help their businesses grow by tackling big questions. How can you lower costs and maximize profits? How can you find new markets and expand your business? And how can you add value to your enterprise?
These issues impact more than just your farm – they affect Missouri’s economy as a whole. Our state has more than 95,000 farms that cover two-thirds of its total land acreage. The total number of farms in Missouri is second only to Texas. However, of all states, the Show-Me State ranks 11th in cash receipts and 31st in average value per acre of cropland. That’s a lot of opportunity – and unmet potential.
In Missouri, agriculture is an $88 billion industry. But farmers and food producers can increase their profits and create value – and an infusion of capital can help. Loans, grants and tax credits can provide the funds you need. Don’t know where to start? MOSourceLink is here to help with a comprehensive list of business resources and opportunities for your agriculture business.
Loans for agribusiness
Agribusiness loans can provide the capital you need. This financing can help purchase land or equipment, cover operating costs, make improvements or get through tough times. A variety of loans are available, many through the Missouri Department of Agriculture. Through the MDA, the Missouri Agricultural and Small Business Development Authority authorizes these loans, which are designed to meet specific needs:
With this program, independent livestock and poultry producers can get loans at low interest rates. You can use the loan to finance 100% of an eligible animal waste treatment system. This includes structures, land, fencing, water treatment equipment and more.
These direct loans can fund the production, processing and marketing needs of alternative agricultural enterprises. Examples of these projects include organic production, bee-related projects, aquaculture and irrigation.
People who haven’t operated a farm or a ranch for more than 10 years are eligible for this loan. The United States Department of Agriculture (USDA) Farm Service Agency offers three types of loans:
- Farm ownership loans, for use accessing land and capital
- Operating loans, to pay normal farm or family living expenses
- Microloans, to meet the needs of beginning farmers as well as non-traditional farm operations
The Missouri Agricultural and Small Business Development Authority (MASBDA) provides these loans, which can be of up to $50,000. The funds are for producers who purchase, build or erect approved conservation plans.
Producers can borrow to purchase land, machinery, livestock, trees or specialty crops. You can also use the funds to purchase, build or improve agribusiness buildings, livestock facilities or a processing facility. The loan can be up to 30% of the purchase price or $200,000, whichever is less.
More loan options are available. Visit the USDA’s Farm Service Agency to learn about national programs.
FSA makes direct and guaranteed farm ownership and operating loans to family-size farmers and ranchers who cannot obtain commercial credit from a bank, Farm Credit System institution or other lender.
FSA does require some borrowers to submit a business plan to be eligible for a loan. The Missouri Small Business Development Center can help with that.
USDA Rural Development partners with communities and cooperatives to fund projects that create strong rural economies and provide capital to local businesses. It also offers a number of direct business loan programs, such as the Rural Microentrepreneur Assistance Program.
Loan guarantees for Missouri producers
These incentives encourage lenders to provide reasonable financing. The programs guarantee to repay the debt if the borrower defaults. The state of Missouri offers several loan guarantee programs:
Designed for 4-H and FFA members, this program guarantees 50% of a loan made to finance a supervised project. Loans are limited to the purchase of livestock, feed, seed, fertilizer, herbicides, insecticides, fuel and out-of-pocket expenses.
This loan loss reserve program encourages lenders to finance energy-efficient improvements on the farm and at home. Animal agriculture farmers who aren’t required to be permitted as a confined animal feeding operation are eligible.
If you need to finance livestock feed or crop input, this program can help. It provides up to a 50% first-loss guarantee on this financing. The loans must be made by eligible lenders and not exceed $100,000.
This program provides a 50% first-loss guarantee. It covers agricultural business development loans. You can use this funding to acquire, construct, improve or rehabilitate agricultural property.
MASBDA provides this 50% first-loss guarantee. It can apply to collateralized loans of up to $250,000. The loans can be made to livestock producers to finance land, facilities or equipment.
Grants for agribusiness
All entrepreneurs get excited about grants. After all, they’re funds that you don’t have to repay. For farmers and producers, these agribusiness grants can help make new programs, facilities and products a reality.
But be VERY careful when browsing for business grants online, as some advertisements promoting “Free money for your business” can be misleading; they’ll request a fee of a few hundred dollars and often only provide you with a list of microloans, which you must repay. We’ve listed loan opportunities above and vetted the grant opportunities below, which are offered by credible and official government sites:
Missouri landowners can get assistance planting cover crops. This cost-share program is available for soils classified as highly erodible. It’s also offered for soils that have organic matter content of less than 2% on 20,000 acres annually.
The Missouri Department of Agriculture reimburses expenses related to marketing and promoting farmers’ markets. Projects should improve the community’s awareness of the market’s location, hours and products sold. Grants are up to $1,000 and must be matched dollar for dollar.
Matching funds are available for projects that work to alleviate food insecurity. Programs must help areas that the USDA identifies as food deserts. These areas have low income, limited access to supermarkets and limited vehicle access.
This is a reimbursement of expenses associated with addressing food insecurity in urban areas. You can use funds to increase food production, the availability of food to residents or economic growth. Applicants must provide at least $0.25 to the project for each grant dollar.
Need help getting locally grown products for use in Missouri institutions? This grant can help. Funds can be used for items like freezers, packing equipment and professional services that can have economic impact for the agricultural industry.
This program funds projects that add value to Missouri agricultural products and aid the economy of a rural community. Applications are considered for business concepts that both:
- Lead to the development and marketing of new or expanded uses for agricultural products
- Foster agricultural economic development in rural communities
This reimbursement is available to producers who get organic certification. The program applies to first certifications or expenses related to renewing a certification. The operation must be in Missouri. It must also comply with USDA National Organic Program regulations.
Grants of up to $50,000 are available for projects that enhance the competitiveness of specialty crops. Projects must address research, food safety, education, marketing and pest and disease for the specialty crop industry. These grants typically go to universities, colleges and other research institutions.
You can be reimbursed up to $7,500 for expenses related to urban farming. These projects can include introducing a new crop or product or expanding agricultural efforts. Training, equipment, business plan development and marketing are all eligible expenses.
Missouri agriculture tax credits
Sometimes, you can get a tax credit for agribusiness expenditures. These programs can help make tax time easier.
If you make a donation to MASBDA to assist rural agribusiness, you can apply for a tax credit. The credit is up to 100% of a contribution made by a person, partnership, trust or LLC. These credits are offered on a competitive basis.
MASBDA offers this credit to lenders who make breeding livestock loans to small farmers. The loan amount can’t exceed 90% of the cost of purchasing the livestock. The lender can’t charge interest for the first year of the qualified loan. The credit is 100% of the interest waived that first year.
This tax credit is 25% of the investment to modernize or expand a meat processing facility. The credit can’t exceed $75,000 and can be shared if two or more taxpayers own the facility.
MASBDA offers this credit for individuals who are members of organizations like co-ops. The group must own and operate a development facility or renewable fuel production facility in Missouri. The credit can be 50% of the member’s investment or $15,000 – whichever is less.