If you're interested in starting your own farm or already run a farm or ranch, you can apply for a farm and ranch loan to get the funds you need to make your business a success. A farm and ranch loan is an affordable source of funds that you can use to get your ranch or farm up and running while you work to turn a profit. Here's a few things you need to know about applying for a farm and ranch loan.
1. There's Multiple Loan Options Available
One benefit of applying for a farm and ranch loan is that there are multiple loan programs available to suit your lending needs. For example, one loan program is intended to assist with operating expenses. Operating expenses are the costs that you have to pay to run a successful farm, like purchasing machinery, buying livestock, or investing in supplies and plants to grow more crops.
An ownership loan is specifically intended to help with the purchase of your farm or ranch. You can use the funds to buy land or purchase the necessary supplies to get your farm running efficiently.
A microloan is a small loan with a less stringent application process that you can use for expenses related to your farm or ranch. It's possible to apply for a microloan even if you have an outstanding farm and ranch loan.
2. Your Loan Program May Have Size Limitations for Your Farm
Some loan programs limit the size of the farm that you can have in order to qualify for the loan. The reasoning behind this rule is that the loan options are primarily intended to help up and coming farmers, not farmers or ranchers with large, established operations. A few different factors affect any limitations associated with the loan program.
The county that houses your farm or ranch will influence acreage limitations associated with your loan. Your loan program will take into account the average sized farm for that area when declaring any size limitations. If you're a member of an under-served group of the population, you may not be subject to any acreage limitations for your farm.
3. You Need to Participate in the Operations of Your Farm
Farm and ranch loans are intended for borrowers who actively participate in the running their farms; they are not intended for individuals who have purchase a ranch or farm for investment purposes. Be prepared to show proof that you participate in the operations of your farm when you apply for your loan.
For more information about farm and ranch loans, reach out to a lender near you.Share