As a farmer you have a lot of job titles and duties you might perform each day to keep your business running successfully. A crucial part to your business is having the proper loans, so your money can be utilized as efficiently as possible. Learn about the 5 most common Ag loans you might use for your farm.
- Farm (Seasonal) Operating Loans
Most farmers use this type of loan as it helps with day-to-day expenses and needs. They also can be called a line of credit and come as indirect or direct loan. If you were to get an operating line from us, at TSB, it would be direct as it would be coming from a private lender and can be more affordable than indirect through the Farm Service Agency (FSA).
Operating loans can help you be more efficient and save money by paying expenses ahead of time, possibly locking in lower rates. This type of loan also helps you purchase seed in the spring and any other expenses before revenues really start coming in during the fall.
- Machinery and Equipment Loan
The first thing to know about farming is that equipment is not cheap and can break down at any time. Machinery and Equipment Loans help cover these costs up, but they also are great for upgrading or replacing equipment including new trucks!
- Livestock Loan
Days, weeks, and months can go by before you take livestock to the market or sale barn and actually get paid for all of your hard work. During that time you still need to feed your livestock and take care of them and Livestock Loans are used for financing your farm while raising cattle. This type of loan can also be used to purchase new beef cattle, dairy or any other livestock.
- Buildings and Facilities Loan
As your farm expands you are going to need more buildings to house equipment, livestock or even crop products. Grain bins fall into this loan category. Even your typical hay style barn that is 1200 square feet will cost about $45,000, estimate other building costs with fix.com.
- Farm Land Loan
Farm land can be extremely expensive, so having a loan that is affordable is key to starting your farm or adding new land to your current property. This type of loan can be used for pasture, crop or land for sheds and buildings.
Tip: Having good credit and experience in the farming industry will help you secure an agricultural loan. If you can show that you have been successful within the farming industry the better!
Whether you are a 5th generation farmer or just starting out, our lenders understand what it means to be a farmer. Talk to one today to learn how we can help you run your farm more efficiently and successfully.
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