Agricultural Farm Small Business Loans  

Business loans help businesses run efficiently. Agricultural loans can be used for a variety of business expenses, such as purchasing equipment, livestock, or seed. Business owners can receive up to $400,000¹ to cover operating costs for their farm.   

There are many loan types available to farmers from traditional lenders like banks or financial institutions, government loans such as the Small Business Administration or Farm Service Agency.  Traditional lenders – such as banks or government institutions – often have lengthy applications and many requirements. Alternative lenders step in with shorter applications, flexible qualifications, and fast processing to ensure businesses get the funds they need when they need it most. SmallBusinessLoans.com partners with top-rated alternative lenders to bring you the best possible financing options for your business. Whether you need to sustain your business or increase production, there’s a financing solution that can help you get there. 

There are many loan types to choose from, depending on what best suits your needs. Here we’ll outline common loan types and how the funds can be used so you can see what might work for you. 

Equipment financing loan
For businesses that need to cover the cost of an unexpected equipment purchase or simply need to upgrade, equipment financing offers a solution. Equipment financing loans allow business owners to purchase or lease crucial equipment for their business. Any essential farming equipment, whether new or pre-owned, typically qualifies with this type of loan.  

Short-term business loan
The length of a loan term is an important factor when choosing a loan and often, agricultural businesses need quick financing to get them through the off-season. Short-term loans are temporary financing solutions with most repayment terms lasting one year or less.  

Working capital loan
If your business is lacking cash flow in an off-season, a working capital loan can help cover operational expenses in the short term. A working capital loan is designed to cover everyday expenses rather than long-term assets or planning. 

Microloan
A microloan provides a smaller amount of funding for short-term, specific needs. This loan type is typically suited for farmers just launching their operation or looking to purchase seeds or other equipment that will grow their business. Microloans are common loan types for farmers and ranchers who need just a little financing to go a long way. 

Installment loan
An installment loan is a general term that refers to any loan repaid on a regular payment or installment. With an installment loan, a fixed amount must be paid with regularly scheduled payments, often on a monthly or even weekly basis. Each payment includes a repayment of a portion of the principal amount borrowed and the interest payment.   

Real estate loan
A real estate loan is used for purchasing land, housing or commercial property. For homebuyers, this is commonly referred to as a mortgage, but an agriculture business could use a real estate loan to buy more farmland or commercial property. 

Farm loans can be used for a variety of things to help sustain your business or help expand it. You can use your agriculture loan for expenses like: 

Finance equipment

• Keep your business running effectively with critical equipment like tractors or combines
• Buy or lease new or pre-owned equipment 

Hire seasonal workers

• Improve production with a bigger workforce
• Prevent livestock or crop loss by having staff available around the clock 

General expenses

• Pay for items like pesticides or seeds needed for your business
• Cover everyday expenses like utility bills or hardware 

Expand your business

• Get financing to invest in your business’s future
• Acquire more crops, livestock, or land to increase production and grow your profits 

It’s important to know the eligibility requirements for an agricultural farm loan. Often, getting financing approved for your farm business can be challenging. But with alternative lenders, the qualifications are simple. Here’s an example of what you could need to be eligible: 

• At least six months in business 
• Minimum $250,000 in annual gross sales 
• Fair to excellent credit 

Many traditional lenders require a lot of paperwork and documentation for their loan – but with an alternative lender, our partners keep the paperwork to a minimum. Required materials are often limited to a credit check and bank statements so you can get approved for funding faster. 

Once you have an idea of what type of loan works best for you and the minimum qualifications, it’s time to gather your application materials. Let’s take a look at how to proceed with securing a loan for your business. We broke it down in five easy steps. 

1. The business determines the loan they can afford and if they meet the minimum qualifications for a loan set by the lender. 
   Many alternative lenders require a business to be in operation for six months and a minimum of $250,000 in annual gross sales.  
2. The business owner then fills out an application and provides the required materials.
   Often, you’ll be asked to provide bank statements and authorize the lender to obtain both your business and personal credit scores. 
3. The lender examines the loan application, credit history of the business owner, and other qualifications.
   At SmallBusinessLoans.com, you’ll be paired with a lender who quickly reviews applications. 
4. The lender determines the loan amount, interest rate, and repayment terms.
   If the business owner accepts the loan terms and provides the lender with the necessary documents, the funds are then transferred to the business.  
5. The business owner repays the loan according to the terms of the agreement. 

Whether you want to grow or sustain your business, fast, reliable funding is the key to achieving those goals. At SmallBusinessLoans.com, we have already done the legwork of sourcing the best lenders to work with and will match you with an alternative lender that’s dedicated to your success. We’re committed to securing funding for agricultural small businesses quickly and efficiently – so you can get back to running your business.