Agricultural producers often search for farm grants when planning a new project. Grants can be useful in certain situations, but they are not available for every purpose or every applicant.

For many producers, farm loans may provide a more practical way to finance land, equipment, livestock, or operating needs.

What Is a Farm Grant?

A grant is funding provided by a government agency, nonprofit organization, research institution, or other program. Unlike a loan, grant funding generally does not have to be repaid when all program requirements are met.

However, grants are often:

Limited to specific projects
Competitive
Available only during certain application periods
Restricted to eligible applicants
Subject to reporting requirements
Reimbursement-based
Unable to cover the full project cost

Some grants may focus on conservation, energy efficiency, research, rural development, specialty crops, or beginning producers.

What Is a Farm Loan?

A farm loan is borrowed money that must be repaid under agreed terms. Depending on the lender and borrower’s qualifications, financing may be available for:

Agricultural land
Farm equipment
Livestock
Buildings
Property improvements
Operating expenses
Agricultural business expansion

Loans may offer more flexibility than grants because they are not always tied to a narrow program purpose.

Can a Grant and Loan Be Used Together?

In some cases, a producer may use grant funding as part of a larger project that also includes personal funds or agricultural financing.

For example, a grant might support a qualifying conservation improvement while a loan finances the land, equipment, or construction required for the overall project.

Before moving forward, confirm that the grant program allows other funding sources and that all financing requirements can be met.

Questions to Ask Before Applying for a Grant

Before spending time on an application, review:

Who is eligible?
What projects qualify?
Is matching funding required?
When will funds be awarded?
Are expenses reimbursed after completion?
What records must be maintained?
What happens if project requirements are not met?

Grant applications can take time, so make sure the opportunity closely matches your project.

Questions to Ask Before Applying for a Loan

When considering an agricultural loan, ask:

How much financing is needed?
What will the loan be used for?
What payment can the operation afford?
What collateral may be required?
When will the project begin generating income?
Does the repayment schedule match the operation’s cash flow?

These questions can help you and your lender determine whether the proposed financing is appropriate.

Choosing the Right Funding Option

Farm grants and farm loans are not interchangeable. Grants may work well for specific eligible projects, while loans may provide broader and more predictable access to capital.

The best option depends on the project, timeline, eligibility requirements, and financial position of the operation.

Oklahoma AgCredit can help Oklahoma farmers, ranchers, and rural businesses discuss financing options for agricultural land, livestock, equipment, and business growth.

Learn more

Farm Grants Versus Farm Loans: What Is the Difference?