Just like a tractor and combine having a dependable source of capital is critical to growing and maintaining your farming operation.  When it comes to getting a farm loan, the requirements can vary depending on the purpose of the loan and financial institution. Whether you’re a seasoned farmer or just starting out, understanding the requirements and types of farm loans could be the key to your success.   

Types of Agricultural Loans

Operating Lines of Credit

A revolving line of credit that is used to fund yearly operating expenses of your farm. This financial tool allows producers to borrow and pay back money as needed to cover costs such as seed, fertilizer, labor, feed, livestock, tillage, and harvest.

Term Loans

Designed for significant expenditures or long-term investments in farming operations such as buying machinery, investing in breeding livestock, constructing, or updating facilities and other large capital outlays.

Agricultural Real Estate Loans

With amortizations up to 30 years, these loans are structured for the acquisition of farm ground, livestock facilities, grain storage and handling facilities and investment properties.

Partnerships

As an USDA approved lender, BankIowa can assist your operation with Farm Service Agency’s direct Farm Ownership loan programs, Loan Guarantee program, Farmer Mac direct loans and letters of Credit.

Required Financial Information

Current and accurate financial information will be critical to successfully obtaining the best financial tools for your unique operation. Required information can vary, but in most instants the below information will be required. 

Farm Business Plan

  • A good business plan includes:
    • Short history and future.
    • Financial Projections

Cash Flow

  • Annual Projection
    • This includes projected income, expenses and scheduled term debt payments
    • Estimate of family living expenses and off farm income

Balance Sheets

  • 3- years of Balance Sheets

Tax Returns

  • 3- years of Tax Returns

Income statement

  • Current year profit and loss statement

BankIowa hopes this information has given you an idea of what you need to start your financial journey in securing a farm loan. If you would like to meet with a BankIowa Ag lender today, contact us here!

Resources:

Farm Loan Programs (usda.gov)