Agriculture is amongst the strongest sectors in the U.S. According to America’s Diverse Family Farms, one farm can feed about 166 people in a year both in America and abroad. For this reason, the U.S government introduced farmland loans to aid farmers in their operations. However, not all farmers can qualify for these loans. There are some requirements that one needs to meet to be given the loan. Below are six ways in which a farmer can be eligible for these loans.
One of the major factors determining if a grower is viable for credit is the credit score. Most lending institutions require you to have a minimum credit score of 660 from no less than one of the three central credit agencies.
2.A Great Business Plan
Most lending facilities require you to provide them with a well-articulated business plan. This plan shows how you will spend the loan you will be given. Providing a business plan helps lending institutions sieve farmers with great potential. Before applying for a farm loan, you are advised to seek professional help in crafting a business plan to increase your chances of qualifying for the loan.
A farmer applying for a farm loan is required to have sufficient income. This income ought to be capable of servicing all business and personal loans. The borrowing institution ensures that you will be able to pay back the loan on time with the required interest.
4.Experience in Agricultural Operations
Loans are available to both small scale and large scale and farmers but one has to have some experience in farming to be eligible for the loan. Farmers applying for farm proprietorship loans are required to have three years minimum experience in farm business operations. Loans for beginner farmers are given to farmers with less than ten years of experience in farm operations.
For you to be considered for a farm loan, it is mandatory to have land with a minimum of 40 acres. Only farmers with permanent farming operations are exempted from this requirement. Small scale farmers with stable farming operations stand at an advantage when applying for these loans.
6.The Farmer’s Assets
For you to be considered for a loan by loaning institutions, all your assets ought to double your amassed debts equivalent, post procurement. The lending institutions require you to have a 60 percent debit-to-asset ratio. Your household furniture is also counted as a portion of your assets.
Farm Land Loans With Bad Credit
Landowners with bad credit can still get a loan from some lending institutions. State programs like FSA give loans to farmers with bad credit provided the farmer has a strong background in farming operations. Getting help from a cosigner is another method of getting a loan with bad credit. The co-signers credit has to better than yours for the loan application to be considered.
Farmland loans aid farmers in running their farm operations smoothly. Loan give farmers the capacity to acquire new farm tools and new farm or farms. If you are looking for a good lending agency, call United Farm Mortgage at (913) 549-3776. Our company offers loans at great interest rates. These loans are available to both part-time and full-time farmers. We have over 35 years of experience in the mortgage sector and 20 loan programs tailored to different farmers.