Am I Eligible for an Agricultural Loan?

August 31st, 2021

Operating a farm or ranch demands a lot of planning, time, and effort. It also often requires a lot of capital, and getting an agricultural business loan can be one of the best ways to finance your property and livelihood.

If you have been wondering how to get financing for your farm, or which bank to count on for an agricultural loan, we’ve put together a handy guide about some loans available for farmers and ranchers, and how to get them so you can stress less about your funding options.

Different Types of Agricultural Loans

When you are managing your farm or ranch, your financing should have clear terms, reasonable interest rates, and your lender should be working to accommodate your specific situation best. Here are some of the common financing options you should consider:

  • Farmer Mac Loans: Since 1980, the role of the Federal Agricultural Mortgage Corporation (FAMC), also known as Farmer Mac, has been to create a secondary market for agricultural lending that provides flexible terms and low-cost options for farmers looking to finance a farm, ranch or agricultural venture.

    Farmer Mac loans are backed by securities, much like other government-sponsored enterprises such as Fannie Mae and Freddie Mac. Your lender will be able to tell you whether a Farmer Mac Loan is right for you and how your business can utilize this financing.

  • FSA Loans: The Farm Service Agency (FSA) provides several types of direct and guaranteed loans to farmers and ranchers:
  • - Farm Operating Loans
    - Farm Storage Facilities Loans
    - Farm Ownership Loans
    - Fisheries Finance Program
    - Farm Labor Housing

FSA loans are designed to help farmers secure low-interest financing that is funded by the government and easier to secure for first-time agricultural borrowers.

  • Agricultural Home Loans: A USDA-backed program, agricultural home loans are first-time farmer loans. They allow for mixed-use facilities such as cattle ranches or crop development facilities that also house the owner-operators.

    Agricultural Home Loans rely more on the individual credit score and financial status of an applicant, so they have a wider range of outcomes. In certain instances, they can be very attractive forms of farm land loans.

These programs are a few ways in which you can finance a farm or ranch without having to take on too much risk. Figuring out which bank is best to work with for an agricultural loan is an important part of taking the next steps towards securing your financing.

The USDA, FSA and FAMC have made a commitment to America’s next generation of farmers and ranchers via their lending flexibility. Whether it is an operating loan, property financing or “beginning farmer” direct and guaranteed farm loan programs, the resources are there if you seek them out.

Banks with lenders dedicated to agricultural financing will be happy to meet with you and help guide you all the way through a loan process.

Who is Eligible for a Farm Loan?

A great thing about agribusiness financing in California is that there is opportunity for people who approach farming and ranching diligently and earnestly. Having a well-written business plan, reasonable credit history and an understanding of which financial options suit your agricultural business needs will go a long way in helping you to get the funding you need.

It is always a positive first step to consult with a qualified and experienced agricultural lender to understand what types of financing may be available to you. Don’t miss your opportunity to start or expand your agribusiness! The right financing may be waiting for you.

Get a Farmer Mac Loan with Community West Bank

Community West Bank can fulfill the financing needs of farmers and ranchers, offering Farmer Mac loans to those who want to buy or refinance farm or ranch land and kick-start their agricultural business.

Our experienced agricultural lending team has devoted many years serving farmers and ranchers specifically, and we’re excited about opening doors to opportunities that exist for you. If you are looking for flexible agricultural financing, please contact us. One conversation could help your agribusiness stay on a path to stronger future growth.

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