What are Your Ag Loan Options?

It’s normal for businesses to borrow money, though it’s hard to tell when to make the move. Whatever the case is, it’s always good to know what options you have before the unexpected happens. The same is true for your farming ventures.

Today, farmers are beneficiaries of ample government and private loan programs that answer to their diverse needs. These programs cater to both short and long term necessities and are available in various forms.

Medium and Long-Term Financing

If you have long terms goals for growth, you’re gonna need funding that would equally support your financial decisions for a longer stretch of time. This is when medium and long-term loans come in handy. They can aid your agriculture-based business to grow, whether your purpose is to expand operations, or increase profits.

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Seasonal Loans

A seasonal loan is a type of short term ag loan that answers to a farmer’s seasonal seasonal needs, the most common of which is funding seasonal assets. These assets typically include farm equipment that only get used during a specific time of the year and remain idle for the remaining months (e.g. harvest plows, bins).

Another loan type that can be used for seasonal needs is the inventory loan, a loan type that can easily cover for a wide range of commodity needs, or when settling accounts receivable.

Asset-based loans are flexible loan types that are adapted to suit a range of purposes such as when you have to meet shortages in cash flow, or cover for immediate cash needs.

Another alternative to financing a short-term need is to get a line-of-credit, which gives you more leeway as to how much you can tap, depending on the timing of your needs.

USDA Farm Loan Options

The United States Department of Agriculture is home to a wide array of loan programs which seek to aid the country’s farmers and ranchers in facing the financial difficulties of their businesses.

Its Farm Service Agency wing, for example, makes direct farm ownership and operation loans to family-size farmers and ranchers who cannot obtain financing from traditional funding sources. They also help beginning farmers and ranchers who are unable to obtain financing from commercial credit sources.

Other programs from the USDA that aid the agricultural demographic of America include:

  • Crop and Livestock Insurance
  • Federal Stock Marketing and Improvement Program
  • Specialty Crop Block Grant Program
  • The Farmers Market Promotion Program
  • Organic Cost Share Program

You may visit the USDA website for more information on these individual programs.

Agricultural Export Support

The United States remains on the frontline of agricultural production worldwide. Though our top destinations are in Canada, Mexico, China, Japan and Germany, our products are consumed all over the world and are therefore vital to national and international economies.

The government knows this well, and is therefore putting forward programs that help American farmers put their produce for export. Private banks also have programs for such purpose.

USDA’s Commodity Credit Corporation, for example, fosters export of American farm and ranch products by guaranteeing export loans. This network maintains relationships with international lenders and export organizations to realize their aim.

Ag Financing

Whatever your goals are for your business, there is a loan option available to help you achieve your goals. Research and familiarize yourself with these choices so you can adequately prepare for your financing application.

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