The farming business requires capital in order to manage livestock, plant, fertilize, and handle other day-to-day farming operations. An agriculture loan may be a considerable loan option to farmers since it is tailored to meet the needs of farmers and they can maximize the potential of their farm land. These loans will allow farmers to update their equipment, invest in new properties, and perform the daily necessities required on farms.
Credit Options
Having good credit will allow a farmer to apply for loans, bills of exchange, notes, and bankers acceptances. Financing a farm with these options provides a borrower the means to maximize their production and farm more efficiently. In most cases, the planting and harvesting cycles will determine which option will be most beneficial. Short-term loan options can help finance daily operations, and long-term options can be used to purchase new properties or additional land. Intermediate-term options can help invest in new machinery and farm equipment, as well as repair and damages.
The Four Primary Options
Each farmer should compare and contrast between the four main loaning options to determine which will benefit them most. A farm equipment loan or line of credit will allow them to use the money to update and repair any equipment or machinery. This loan is restricted to equipment financing only.
A real estate loan is also available, which can refinance a mortgage, purchase new land or a new home. Although this option is not common, it is useful for emergencies, such as fire damage or flooding damage.
Long and short term loan options are also available, and the use of the funds can range from paying off debt, or purchasing farm supplies. Specialty loans are also available and can be used for similar purposes.
Time
Borrowers of an agriculture loan in Fresno should be aware that closing the loan can range from one to two months. For backup, it may be wise to apply for a loan as soon as you may require any capital. Interest rates will typically start at 2.95% over prime. The loan-to-value is usually between 75-85%, and there are no pre-payment penalties.
