How To Get A Loan For Farm Equipment?

Answer 1

The agricultural business depends heavily on farm equipment to be able to harvest the right amounts of produce. Farm equipment enables farmers to produce larger amounts of food at higher levels of efficiency. Family farms as well as large agricultural organizations benefit from quality farm equipment. Unfortunately, sometimes families and businesses need extra financial help in order to get the equipment they need. For these situations, loans for farm equipment are available. Here is how to get the best terms for a farm equipment loan.

1) Carefully go through the entire farm and estimate what equipment you will need. Make a list of these estimated needs, and see what current prices are for each of them. It is important to do all the research ahead of time in order to streamline the process later. Go through different manufacturers to find the best price. Do not forget to plan for future needs as well as present ones, since it is cheaper to finance purchases now rather than applying for new loans every season.

2) After making a list of needs, gather all financial data associated with the farm, including personal documents. Lenders will need to know the financial history of the business in order to make a decision.

3) Start looking for farm equipment loans from a personal banker or a local institution with an established relationship with the farm. Familiarity breeds confidence in the lending business; for this reason, going to someone already well-known will raise the chances of getting approved.

4) Also get in touch with specialty lenders who deal specifically in farm loans. There are plenty of banks that focus on farm lending alone. Online lenders may offer better rates than physical banks.

5) If the farm in question qualifies as a business in special circumstances, apply for low-interest loans through the Department of Agriculture’s Farm Service Agency. The purpose of the FSA is to assist farmers who do not have enough capital assets to qualify for regular loans. FSA loans are also meant to help farmers who have suffered losses from natural disasters.

6) If financing is still unable to be had, consider leasing the equipment instead of purchasing it. Loans can be applied for on the basis of leasing instead of purchasing.