Criterion #5: Unable to Get Financing on the Commercial Market
For an entity applicant, all owners must be unable to obtain financing for their farm venture in the commercial marketplace. When determining if this criteria is met, the FSA will consider the actual needs of the farm business, as well as the terms and interest rates offered on the commercial financing market.
This does not strictly require that the applicant be outright denied at other financing institutions. Applicants will only be required to furnish credit denial letters from other lenders if the FSA loan officer determines that the applicant does have the reasonable potential to obtain financing elsewhere. Applicants must certify in writing that they cannot get sufficient credit. The reasons for meeting this criterion or failing to meet this criterion will be recorded in the loan file.
Note that credit via “subprime” lenders like credit cards and finance companies does not mean the applicant is eligible for financing elsewhere. FSA will still consider these applicants for FO loans.
Criterion #6: No Delinquent Status on Federal Debt (unless IRS debt)
For an entity applicant to meet this criterion, each individual owner must not have a delinquency in any federal debt other than tax court judgments.
Criterion #7: No Outstanding Unpaid Judgements Obtained by the US in any Court
For an entity applicant to meet this criteria, no individual owner can have any outstanding unpaid judgments from any U.S. court. These would be court orders to pay a certain sum of money. If these judgments are not yet paid, an applicant can pay in full prior to the FSA loan closing and still participate. However, any such judgments will be taken into consideration when evaluating the owner’s creditworthiness.
Criterion #8: No Federal Crop Insurance Violations
All individual entity members must certify that they have not ever been disqualified from federal crop insurance programs. This would happen if an entity member had intentionally provided false information to the insurance provider. The Risk Management Agency notifies FSA’s National Office of disqualified individuals, who then notifies the State and County offices.