Farm and Ranch Loans for Land and Improvements
Buying Land and More
Farm and Ranch Loans
Farm and ranch loans play a crucial role in supporting farmers and ranchers as they establish, expand, or maintain their agricultural operations.
Here’s a concise overview: Operating Loans: Purpose: These loans provide liquid cash for various needs, including purchasing livestock, seeds, equipment, and covering operating costs. Example: Imagine a new farm getting off the ground—operating loans help cover family living expenses during this critical phase.
Farm Operating - Microloan: Purpose: These loans facilitate farm or ranch acquisition or expansion. They can cover closing costs, building construction, and soil and water conservation efforts. Example: Jesse and Tracey Paul used a Farm Ownership Loan to purchase their farm in Trout Creek, Michigan, where they now produce pure maple syrup.
Microloans: These are smaller loans designed to assist with specific needs. Example: Brian and Laurie Olson in Alaska expanded their berry operation with an Operating Loan.
Guaranteed Loan Maximum Interest Rates: Lenders cannot exceed specific interest rates at closing. Remember, farm loans are essential for sustaining agriculture, fostering growth, and ensuring food security. Farmers can explore these options through the USDA Farm Service Agency. Farm and ranch loans may be used to purchase land, livestock, equipment, feed, seed and supplies. They can also be used to construct new buildings or make improvements on your farm.
Beginning Farmers
Farm and ranch loans are often provided to beginning farmers or ranchers who cannot qualify for conventional loans because they have insufficient financial resources.
Established Farmers
Farm and ranch loans can also help established farmers who have suffered financial setbacks from natural disasters, or whose resources are too limited to maintain profitable farming operations.
Prepare for your loan application
1. Do not solicit price information without being able to provide all of the necessary information about the property. Instead, put together a loan package that will include the property description, surveys, last financing application, summary of income produced by the property, owner's experience, and other sources of income.
2. Make sure you shop for a loan among the best lenders for your loan needs. This can be daunting for you in terms of time and effort since you will have to identify those lenders and provide each with another loan application. The answer is to use a loan broker that will shop your loan to several qualified lenders using the same loan application. That broker has a financial interest in seeing your loan close, so they will follow up with the lenders to get it done.
3. Be sure you are comparing apples to apples. If you get several offers for your loan request, be careful to determine that each is meeting your criteria. A loan broker can sift through the offers and give you advice on the best deal for you.