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Guaranteed loan

A loan made by a private lender (like a bank) where a government agency, such as the USDA, promises to pay a portion of the loan if the borrower defaults. This reduces the risk for the lender, making them more willing to lend money.

Loan guarantee

The promise by a government agency (like the USDA) to cover a specific percentage of a loan made by a private lender, should the borrower fail to repay it. It's a form of insurance for the lender.

Preferred Certified Lender/Certified Lender

These are private lenders (banks or credit unions) that have a proven track record and specific qualifications with the USDA, allowing them to process and submit guaranteed loan applications with more authority and often faster. 'Preferred' lenders have even more autonomy.

Farm ownership loan

A loan specifically designed to help farmers buy, enlarge, or improve a farm, or to refinance farm-related debt.

Operating loan

A loan designed to help farmers cover annual operating expenses, such as buying feed, seed, fertilizer, or livestock, or paying for repairs and other essential costs.

Business and industry guaranteed loan

A loan backed by the USDA that helps private lenders provide financing to rural businesses for purposes such as business development, modernizing facilities, or creating jobs.