What is a grant?
A grant is money given for a defined purpose that does not have to be repaid if you follow the rules. Grants usually come from governments, foundations or other organizations, and they are competitive, since many applicants seek limited funds. They often require a detailed application, reports and records showing how the money was used.
Grants for individual farmers are less common than many people think. Many go to projects, groups, research or specific purposes. Always read what the grant pays for. A useful habit is to write the name of the funding source at the top of your plan, then list what it pays for and what you must do to receive it. That one-page list shows quickly whether the project really depends on money you do not yet have.
What is cost-share?
Cost-share means a program pays part of the cost of an approved practice, and you pay the rest. Conservation programs such as NRCS's EQIP work this way for many practices. You commit to installing and maintaining the practice, and payments are usually made after the work is done and verified, though advance options exist for some participants.
Cost-share is not free money. You front some of the cost and meet contract requirements. If you do not follow the terms, you may not get paid or may have to repay. Contracts for cost-share usually spell out the practices, the amounts and the schedule. Read yours more than once and ask questions before signing.
What is a loan?
A loan is money you borrow and repay with interest. FSA, banks and Farm Credit institutions make farm loans. Loans are not competitive in the way grants are, but approval depends on repayment ability, credit history, collateral and program rules.
The great advantage of a loan is that it can fund almost any sound business purpose. The cost is the obligation to repay, so the loan must fit your income. Think about what the loan does to your future flexibility. Every payment reduces what you can spend on other things, so borrow for projects that raise income or lower costs.
How do they compare?
Grants and cost-share are sources of support, while loans are sources of capital. Many projects use a mix: cost-share to offset part of a conservation practice, a loan to cover your share, and your own savings for the rest.
Ask three questions about any funding source: Do I repay it? What must I do to earn it? When does the money arrive?
- Grant: no repayment if rules are followed, competitive, often restricted
- Cost-share: partial reimbursement for approved practices, you pay the rest
- Loan: borrowed money repaid with interest, broader uses
- Insurance and disaster payments: tied to covered losses
How do I choose what fits my goal?
Match the source to the need. Buying land or equipment usually calls for a loan. Installing fencing, water systems or soil practices may qualify for cost-share. Research or special projects might fit a grant, if one exists.
Do not shape your farm plan around a grant that may not come. Build the plan so it works without it, and treat any award as a bonus. A farm may combine all three over the years: a loan for equipment, cost-share for conservation work and perhaps a small grant for a specific project. Each has its own paperwork, so keep separate folders.
What are the risks to avoid?
With grants, the risk is wasted effort and scams. With cost-share, it is starting work before approval and losing eligibility. With loans, it is borrowing more than the farm can repay.
Also watch reporting duties and taxes. Grant and cost-share payments may be taxable income. Ask a CPA, and review IRS guidance for farmers.
Where do I start looking?
Visit your county FSA, NRCS and extension offices and ask what is open now. Check Farmers.gov, which lists many USDA programs, and your state department of agriculture. Land-grant universities and sustainable agriculture organizations often publish funding guides.
Make a one-page profile of your farm and your goals to bring to each meeting. It saves time and helps staff point you to the right program. Keep a funding calendar with signup windows and deadlines. Many programs open once a year, and a missed window can mean waiting a full cycle.
Key takeaways
- Grants are given for defined purposes, are competitive and are less common for individual farmers than people expect.
- Cost-share pays part of an approved practice, usually after the work is done.
- Loans must be repaid, but fit many business purposes.
- Build your plan to work without a grant.
- Check with a CPA about taxes on any award.
Sources and official links
Last reviewed: November 12, 2026. Written by the Farm Money & Grants Editorial Team. Educational only, not tax, legal or financial advice. See our editorial policy.