Financing for the Agricultural Industry

Agricultural industries need to be flexible and attentive to avoid potential problems and capitalize on successes to increase profits. To do this, having access to capital, at the right time, is critical.

 

Types of Agriculture Financing

 

There a many avenues for farmers and other agricultural businesses to obtain needed financing. The best option depends on the company’s size, current profits and the amount of time it has operating.

 

  • Small business loans

    Designed specifically with small businesses in mind, SBA loans are often easier to qualify for than bank financing thanks to government incentives for lenders. They provide working capital that can help farmers to purchase land or other industry-specific equipment.

  • Traditional lending

    Offering excellent interest rates, traditional bank loans have extra requirements, such minimum years in business and financial statements showing profitability.

  • Alternative agriculture financing

    If businesses have had difficulties securing traditional loans because of recently starting up or having past debt, there are a number of agricultural financing solutions possible, such as bridge loans, asset-based lending and equipment leases.

  • Merchant cash advances

    Instead of waiting a month or more for urgent income from customer invoices, merchant cash advances provide immediate capital in exchange for a certain amount of future sales.

 

Industries That Benefit From Agriculture Financing

 

The term agriculture involves far more than corn or soy growers. A number of different businesses are dedicated to agriculture, each with their own specific challenges and opportunities:

 

  • Dairy
  • Livestock
  • Poultry
  • Produce
  • Grain
  • Organic cultivation
  • Farming
  • Lumber
  • Fisheries
  • Veterinary practice
  • Cotton

 

How Agriculture Financing Can Help Businesses

 

  • Payroll

    Loans can bridge the gap in emergencies and provide funds needed to pay employees.

  • Staff expansion

    Seasonal industries find agriculture-based loans very helpful for hiring additional workers when needed.

  • Equipment

    Farming often depends on complex machinery with a significant upfront cost. Custom business financing or equipment leases allow farmers to secure the equipment required even if they don’t have sufficient capital on hand.

  • Technology

    Staying up-to-date with the latest technologies and agricultural innovations is vital for profitability in farming, livestock, produce and other industries. With diverse loan options, startups and established brands can remain on top of new trends.

  • Capital

    Working capital provides flexibility both as a preventative measure and for positive expansion, allowing businesses to weather emergencies, overcome obstacles and take advantage of prime conditions to grow significantly.

  • Marketing

    Connecting products with purchasers large and small is essential for any business. Specialized financing directly related to marketing boosts profits thanks to increased brand recognition and online exposure.

 

Because technology needs and labor requirements for each type of agriculture industry varies, it’s important to choose loans tailored to the size, revenue and future needs of the specific company.

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