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Your Guide to Farm & Ranch Financing

Published September 9, 2019

Whether you have an established farm, or if you are looking to obtain one, it is wise to consider your finance options before you commit to a piece of property. While farm loan financing can be challenging and confusing, there are options available to you that make finding the right farm loan far easier than it would be on your own. Loans are a crucial part of ensuring that your farm is paid for in a manner that respects both your long-term vision for your land and the current state of your finances. If you are curious about finding loans for a farm, but you are lost or confused about how to begin or where to look, then follow our simple guide below to get started.

Where do people get money for farms?

Most people are not aware of the different sources of funding that exist for farmers in today's world. The United States Department of Agriculture provides some different farm loan programs that can make life easier. The size and nature of their available loans depends on a few different factors. For example, you may qualify for a different set of loans if you're an urban farmer than you would if you're a more traditional rancher. Of course, they will assess your different loan qualifications depending on your unique situation, but it can be a good place to check if you're not sure. Obviously, banks offer loans for farms as well, but they are often more difficult to qualify for, and they require more information. It's always a good move to look around and explore your options before you commit to one source of funding for your farm. Plains Land Bank offers a variety of flexible loan programs that are designed to meet all of your rural estate financing needs. Farm and ranch property loans are offered to full and part time farmers and ranchers.

What kind of expenses should I expect?

Because U.S. farmland is such a major market, there are many factors to consider. The total value of farmland and buildings in the U.S. came to around $2.7 trillion in the year 2018. While your specific situation is perhaps the largest contributing factor to determining the size of the loan you will need, there are many steps you can take to educate yourself so that you are more prepared when it is time to speak with someone about farm loans. First and foremost, you should take the size of your property into account. How many acres are you looking to finance? Does the property include a water source? What are other properties in the area selling for? Knowing some basic numbers about your future farm purchase will help you to achieve a more accurate picture of the types of loans you might need

You will also want to do an analysis of any structures or assets that are included with the farm you are interested in purchasing. For example, the property will probably have a higher value if it has multiple barns and housing structures. This means that you will need to consider this as you search for loans. More expensive properties mean you may have a greater return on your investment in the long run, but it also means that you will need to be prepared to take out a larger loan and provide a larger down payment.

As a prudent first step, it is also wise to perform a comprehensive analysis of your financial situation. This means you should take a look at your current budget, including your income, expenses, and past tax statements. Having a thorough working knowledge of your overall financial picture will give you the confidence you need to seek out the right types of loans.When you are looking to buy a farm, it can be quite exciting. But it can also be confusing and overwhelming, especially if you are not certain how you are going to fund your purchase. By securing the right farm credit system, you can give yourself the peace of mind to focus on the things that really matter. If you are looking for a farm loan, but you are not sure where to start, then contact Plains Land Bank today. We would love to help you get started on finding the right property that will bring you joy and prosperity for years to come.