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Different Farm Loans And How They Work

By Sandra Hill


Farming is hard work, and those who are successful at it treat it like the serious business it is. Farmers know they will have good years and bad years, and they plan ahead for both. Most have some type of business plan when it comes to expansion, operation, and workers. In order to keep their plans on track, a lot of farmers turn to financial institutions for farm loans.

When someone thinks about a property loan, they usually think about putting an asset up as collateral for money. This is often true, but not always. If you own the property you are farming, and need additional funds to get through the year, you might consider going to the bank and getting a loan against the acreage you are working until the crops are harvested, and you have cash to repay the lender.

For those who want to get into the farming business, but do not have the land or equipment necessary to start, a lender may be able to help. There is money available for these individuals if they can convince the financial institution they have a good plan and are realistic about what they want to do. Starting a farming operation is expensive and usually takes time before it begins to show a profit. Most lenders are aware of this and factor it into the decisions they make.

A lot of times farmers, like other businessmen, need capital to expand. In this case, they can go to an institution and apply for an operation loan to assist them with the day to day operation of the business. They may be able to qualify for up to one million or more dollars to get the money they need to expand their business. For those who do not qualify for private funding, there are often loans of up to three hundred thousands dollars available.

For those who produce crops that require storage, there are special funds available to help build the necessary structures needed to store produce until it is ready for market. If you are farming certain crops such as corn, wheat, peanuts, soybeans, hay, vegetables, and fruits, you may quality for up to as much as five hundred thousand dollars.

Many times farmers need help working the land and choose to use migrant workers. There are very specific rules that the federal government sets down as to how these individuals may come into the country to work, how long they can stay, and how much they must be paid. Farmers who house these individuals can apply for loans to improve the housing they offer workers. This can even include the furnishings inside the housing that is provided by the farmer.

Commercial fishing operations often need extra money to stay in business. Boats wear out and have to be repaired. This can be very costly. If a fishery wants to expand, the owners may have to apply for funding.

Most farmers love the work they do and would never want to do anything else. Sometimes they just need a little financial help to keep the business going from one year to the next.




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