What Type of Farm Loan Do You Need?
For just about every type of farm operation there’s a loan to match. Figuring out which is the right one for you starts with assessing your needs — whether that’s a new land purchase, equipment upgrades, livestock, or a completely unique set of circumstances.
We’ve created a guide to help you learn more about the different types of financing options available and how they’re designed to serve the needs of farmers like you.
Farmland Loan
A farmland loan is, as you might expect, a loan for a real estate purchase. This type of loan is often used by established farmers to expand their acreage, or refinance their existing mortgages. There are farmland loans with fixed rates, variable rates and revolving lines of credit, that offer flexibility based on your financial situation, long term or short-term needs. Learn more.
Operating Loan
If you need funds for things like feed, fertilizer, minor building improvements or other basic operating costs then an operating loan could be the right option for you. These are loans that give you access to cash you need when you need it so you can keep your business running smoothly.
A revolving operating loan is similar to how a credit card works. You have access to a certain amount of money you can draw from and pay back repeatedly over the course of one year or multiple years.
By contrast, a non-revolving operating loan offers a set amount of funds that can be used one time. Learn more.
Equipment & Facility Loans
Equipment & facility loans can be used for purchasing heavy equipment. While they can be in the form of a monetary loan, they don’t always need to be. Sometimes it makes more sense to lease a piece of equipment (or in some cases a fleet of equipment). That could be the right move if you’re in need of equipment for a short time or don’t want to take on the risk of repairing or replacing equipment that you own. Learn more.
Starter Loans
Farmers who are just starting out may have a harder time getting a traditional loan simply because as a beginning farmer you don’t have a long financial history. Starter loans are designed to consider factors beyond financial history and consider things like school or work experiences, strong family support or other evidence that signals you’re a responsible person. Learn more.
Compeer offers newer farmers the chance to take advantage of our Groundbreakers program. Farmers who are 35 years old or younger and have been farming for less than 10 years can get access to operating funds as well as workshops, training and resources that help them have a better understanding of the financial side of farming. Learn more.
Livestock Loans
Livestock farmers know that what you need to be successful one year might not be the same the next. Livestock loans can provide the funding you need to stay flexible and able to keep up with changing demands. Livestock loans can be used to start, grow or restock your feedlot. They can also be used if you’re planning to diversify your organization by adding new types of livestock to your operations. Learn more.
Organic Bridge Loan
Transitioning from a conventional farming operation to an organic farm doesn’t happen overnight. An organic bridge loan can help you maintain liquidity while you work towards achieving organic certification. Learn more.
Loans for Emerging Markets
Non-traditional farms like urban farms, bee keeping operations or direct-to-consumer produce businesses need loans, too. Loans for emerging markets, like the kind offered at Compeer, can help get business owners in these markets access to the funds they need to operate. Learn more.
The best thing to do if you aren’t sure about what loan or financial product is the right fit for your operation is talk to a lending professional who understands agriculture. They will be able to help sort through the available options and match you with a loan or lease that serves your situation best.
Get farm loan advice you can trust from Compeer Financial. Contact us now to connect with a financial professional who understands the ag industry.