There are various loan providers that offer farm loans in the United States. Some of the major farm loan providers include the Farm Service Agency (USDA), SBA lenders, online lenders, and other commercial lenders. With the help of farm loans, farmers can start, grow, or maintain their farming businesses.
In this article, you will learn about farm loans in general and the best loans available for farmers in 2024. Furthermore, you will also learn about the various sources of loans. Apart from that, we will also guide you on how to get a farm loan for your agricultural business quickly. Hence, to learn more, read on through to the end of the article.
Farm Loans – A General Overview
With the help of farm loans, farmers in the United States can start, grow, or run their agricultural businesses. Apart from that, these loans also help farmers buy farms and operate or expand them with time.
According to NerdWallet,
“Farm loans help farmers and ranchers start, grow, or maintain their farming businesses. These small-business loans can be used to cover operating expenses, purchase livestock, buy farm machinery and agricultural equipment, as well as construct farm buildings, among other purposes. Loans for farms are available from a range of sources, including government agencies and lenders that specialize in agriculture.”
Basically, a farm loan can assist a farmer with liquid cash during the startup phase of the agricultural business. Furthermore, a farm loan can also help an established business if it is going through a cash crunch or a seasonal challenge. A farm can take a farm loan for some of the major reasons, like equipment, crop, and livestock financing.
Also, depending on the size of your farm, the farm loan you apply for can vary. Apart from that, the approval of your farm loan also depends on your financial history, collateral, etc. You will get a loan once you qualify for a Farm Service Agency (FSA).
What Are The Best Farm Loans In 2024?
The following are some of the best farm loans you must look out for in 2024:
1. FSA Loans
The Farm Service Agency, under the US Department of Agriculture, offers various loan options to farmers. If you want to check your eligibility, the FSA website says –
“Use the Loan Assistance Tool to check your eligibility for FSA Loans, discover FSA loan types, learn about FSA Loan requirements, and walk through the easy-to-understand instructions when completing the forms.”
2. SBA Loans
SBA loans also offer loans with competitive interest rates and long repayment terms. Furthermore, the funding amounts of SBA loans are generally higher. Two common types of SBA loans among farmers are the SBA 7(a) loans and the SBA 504 loans.
3. Farm Plus Financial
It is an asset-based lender and offers both farm loans and lines of credit. They secure their loans through agricultural real estate, which makes it a good option for new farmers.
4. Farm Credit Organization
This is a network of lending institutions owned by various farmers, agricultural businesses, and ranchers across the United States.
5. National Funding
If you have bad credit, this farm loan can be a good option for you. They offer short-term loans as well as equipment financing options.
How Do You Get Farm Loans?
According to Investopedia,
“Farm loans vary depending on the size of your farm, your financial history, your collateral, and whether you qualify for a federal Farm Service Agency (FSA) loan program or a farm program designed by a commercial lender. […] Even if you have less-than-perfect credit, limited experience, or less down payment money than you wish you had, you’re bound to find a lender in this list that can work with you.”
The following are some of the major steps you need to take if you want to get farm loans for your agriculture business:
1. Focus On Your Need For Farm Loans
This goes without saying, as you will need to have a good reason behind your applying for farm loans. You need to have a good idea of why you need a loan and what you are using for. This can help you find out the type of financing that is right for your business. Furthermore, you must also be aware of your financial situation and current income. Hence, you can evaluate how much debt you can actually pay back.
2. Evaluate Your Requirement For Farm Loans
The loan requirements that you need to fulfill depend on the loan you are applying for and the lender that you choose. Here, most of the lenders that offer farm loans will ask for your personal credit score, annual revenue, and your time in business.
In addition to that, with farm loans, lenders will pay close attention to your business and how you do as per industry standards. Apart from that, they will also check your management experience, your business plan, the amount of land, and other assets.
3. Compare Farm Loan Lenders
Once you qualify for a farm loan, many lenders might want to offer you the desired loan. However, you must choose the one that is best suited to your business. If you think that you qualify for a loan, you will need to start your search with various low-interest options. This will help you in paying back your loan faster.
4. Apply For A Farm Loan
After you choose your lender, you will need to gather the necessary documents for your loan. Actually, you will need to submit these documents in your application. Apart from that, many lenders offer you representatives who can also guide you through the loan process and all the documents that you need to show.
After you submit your application, the funding and approval time will vary based on the lender that you choose. In general, online lenders fund your loan applications faster than traditional lenders.
Wrapping Up
Hope this article was helpful for you in getting a better idea of the best farm loans in 2024. Before you apply for a loan, make sure you go through the loan options in the article. Do you have some more suggestions on farm loans? Consider sharing your information with us in the comments section below.
Continue Reading:
