Agricultural loans have always proven to be a great way for farmers to fund their agriculture business and meet their financial needs. Today a wide variety of loans are available to fund farms, hobby farms, ranches, and even county side estates. However, there are multiple factors that should be taken into consideration before you get into your first agricultural loan.
So, here are the top 5 tips that you should keep in mind when shopping around for an AG Land Loan.
- Keep Approval Turnaround In Mind
It is common for agricultural businesses to experience some cash flow highs and lows every season. However, you cannot always prepare for such situations. In addition, if you are seeking finances to buy another piece of land, it is likely that other farmers are bidding for it too and you’d want to secure the funds and buy the land as quickly as possible for you. So, it is very important for you to find lenders with an easy process of application to get your loan approved quickly. Before you apply for a loan with any lender, see how quickly you want to get your hands at the desired finances and if the lender’s general approval turnaround appears to be in line with your requirements.
- Get Your Financial Statements Ready Beforehand
When applying for an agricultural loan, or any other loan for that matter, it is important to get all documentation ready – especially the financial statements showing your cash flow of late. Also, prepare your balance sheet that summarizes all your current debts and the assets you may have. It is a good idea to note down any other off-farm income that you expect would support your business. Every lender would like to have a look at these documents before they could approve your loan application.
- Settle For A Favorable Loan Term
Obviously, you would want to go for a loan available for a longer term so that you get enough time to pay the money back. Keeping the loan term in mind, make a few projections on the income of your agricultural business in the coming years or months to establish a favorable loan term in which you’d be able to repay the loan without any issues.
- Choose An Ag Land Loan With Flexible Repayment Options
Some lenders will offer you flexible options for the repayment of your Ag land loan. For example, you may be allowed to choose interest-only payments for a given time period or they may allow you to make repayments only in those months when your agriculture business traditionally generates revenue (the harvesting season). So, it is always in your interest to go with a loan that offers flexible repayment plans.
- Look For Bundling Options
Sometimes, you can bundle several agriculture loans together to form your own package. As a result, you can save considerably on your loan fees. For example, it is possible for you to combine an agricultural land loan with a farming equipment loan or an agribusiness credit line. Always check for such options and go with the most cost-effective alternative.
Now, if you are ready to secure your first Ag land loan, check out unitedfarmmortgage.com – a trusted provider of agricultural loans. Get a loan with favorable terms and start building your agricultural empire.