Ways to Finance Your Agricultural Land Overheads

Ways to Finance Your Agricultural Land Overheads

Why is agricultural land important? While the land area devoted to agriculture has dwindled over the past decades, agriculture remains one of the forefront industries in the country. Not only is agricultural land important to farmers and ranchers but to everyone. Without it, there will be no food on our tables.

Owning a farm is not a far-fetched dream. In fact, there are many ways to own 260 acres of land that you can develop. As important as your courage and determination will be, you need to have ample capital to be successful. An agricultural land loan is available for both beginner farmers and those who wish to expand their operations

THE USDA: Committed to Giving Opportunities for Growth

The United State Department of Agriculture started in 1862. It was designated to assist farmers and ranchers, and help modernize their immediate communities. Today, many Americans benefit from programs by the USDA, farmers and non-farming individuals alike.

Through the Farm Service Agency of the USDA, agricultural land loans are offered or guaranteed. These programs also offer support for women, minority, and beginning farmers. Here are some of the loan products farmers and ranchers may explore.

Guaranteed Farm Loan Programs

In a guaranteed farm loan, the FSA acts as the insurer of the loan. It does not fund or originate the loan itself. It is the commercial lender who provides financial-backing and services the loan to applicant farmers. The commercial bank or lending institution has to be USDA- approved for them to offer such a loan.

Another guaranteed loan product is the EZ Guaranteed loan. With the EZ loan, the application process becomes streamlined. This translates to speedier approvals, thus cutting the waiting time shorter. The loan cannot be more than $100,000 but without a minimum loan amount/ This is designed for beginning, small and traditionally underserved farmers.

>>Look for a USDA-Approved Lender>>

Direct Farm Ownership Loan

Unlike the guaranteed loan where a private lender provides the funds, a direct farm loan does not. This means that the loan is owned, funded and serviced by the FSA. The fund comes from the USDA’s yearly budget. There are three types of direct farm ownership lands for you to choose from: regular, joint financing or down payment. This loan can be used to purchase new farms or buy agricultural lands.

One other kind of direct farm loan is the Direct Farm Operating Loan. It works very similarly to the ownership loan. The main difference is that this loan is designated to cover operating expenses, such as the purchase of seeds, roots, chemicals, operating equipment or the improvement of homesteads, outbuildings, and other structures.

There is a wide array of funds for agricultural land loans available. The FSA’s microloan can also be used as capital for this purpose. Also, commercial banks and lending companies can be traditional sources. This is also another capital source with farmers and ranchers can tap if they are in the hunt for agricultural loan loans. An agricultural loan will provide you with a tool to improve your farm’s profit.

>>Discover many options for Agricultural Land Loans by clicking here.>>