Farm loans help farmers keep their businesses running by providing capital that allows them to replace equipment, fund startup costs, or hire more workers. If you’re in need of an farm loan or line of credit, our expert guide can help.
Reviewed by: Sarah Brooks, Personal Finance Writer and Editor
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Farmers have to look at their finances differently. Depending on weather and the seasons, a farm could be in full-swing one month, but not so much the next. Plus, many farmers rely heavily on seasonal workers and expensive equipment to run their businesses.
The best small business loans for farms provide relief when equipment breaks, when farmers need to secure more land, and so much more. To make your life easier, farm business loans are offered by a number of different lenders.
When it comes time to choose the right loan for your farm, there are many things you’ll want to consider before signing. In this review, we highlight the terms, rates and fees of each lender and explain what makes them a good option. We also share potential downsides of each lender, and provide a rating methodology you can use to select the best option for your needs.
Excellent customer reviews on independent review sites
Pros & Cons
Multiple lenders and loan products
Excellent customer service
Competitive interest rates
Poor credit is accepted
Annual income requirements may be high
Phone calls are required during application process
If you’re in need of a loan for your farm but aren’t quite sure which product or lender to choose, we recommend Lendzi. Lendzi was founded in 2020 and they are both a direct lender and a partner with more than 75 additional lenders. Because of this, they can match you with the perfect loan and lender for your farm business. And, if you’ve previously been denied a loan or have bad credit, Lendzi will work to find you a loan, too. Their application takes a few minutes to fill out and will not impact your credit score. Once you apply, a representative will reach out to guide you through the rest of the process.
Main Features Lendzi offers seven different types of small business loans for farm businesses, including short- and long-term loans, merchant cash advances, business lines of credit, working capital loans, equipment financing, and SBA loans. Most max out at $400,000, with the exception of equipment financing loans ($2 million) and SBA loans ($5 million). Terms and rates vary depending on product and lender. To qualify for a loan from Lendzi, you should be in business for at least six months and have $180,000 in annual revenue. Lendzi doesn’t care as much about credit score, but of course, the higher your score, the better the rates you’ll receive.
If you aren’t quite sure what type of loan is in your best interest, we recommend Lendzi. Not only do they offer a multitude of products and lenders, they also have representatives that guide you along the way. Lendzi also has more than 2,000 5-star reviews, making them a top choice among customers and businesses alike.
Industry best factor rate for MCA - as low as 1.10
APR for the Line of credit product starts at 35%
Flexible repayment terms up to 16 months
Get funding in as little as 24 hours
Check your rate with a soft credit pull
Pros & Cons
Fast and easy application
Quick funding times
Large loan amounts
Flexible loan terms
Rates are not disclosed prior to application
Not available to startups
Not available to all industries
Backd was founded in 2018 to offer financial solutions to small businesses that may not qualify elsewhere. Loan terms are large - up to $2 million - and payment options are flexible. Backd works with your unique business to find a funding option that is tailored specifically to your needs.
Main Features Backd offers two loan products to farm businesses - working capital loans and business lines of credit. Working capital loans range from $10,000 to $2 million with terms up to 16 months. Payments are made daily, weekly, or semi-monthly. Business lines of credit range from $10,000 to $750,000 with unlimited terms. With this type of funding, you can draw on your funds at any time, pay them back, and use them again. To qualify for either option, you need to be in business for at least one year, have annual revenues of $100,000 or more, be based in the U.S., and have a business bank account.
Backd makes it easy for farm businesses to apply, get approved, and get funded. If you need flexible payment plans, we recommend a working capital loan from Backd. If you’d rather be able to draw on your funds at any time, a business line of credit could be the right fit for you. Backd tailors their loans to you, not the other way around, making them a top choice for agriculture business loans.
Easy application: You can apply for an equipment loan online, within minutes.
Fair credit accepted: Even if you have fair credit, National Funding may approve you for equipment financing as it accepts borrowers with credit scores of 600 or higher.
No down payment required: You don’t need to put any money down to take out a National Funding equipment loan.
No special interest loans: While National Funding states it offers business loans to minorities, it doesn’t offer any special loan products for them.
High annual revenue requirement: National Funding only lends to farms who earn at least $250,000 per year so it can be difficult to qualify if you’re a startup or newer farm.
No mobile app: Unlike other lenders, National Funding doesn’t offer a mobile app you can use to keep tabs on your loan on the go.
National Funding equipment loans can help you pay for new and used equipment for your farm, such as tractors, backhoes, front end loaders, plows, cultivators, and wagons. Depending on your situation you can lock in up to $150,000 in funding.
Main Features National Funding’s equipment loans go up to $150,000 with repayment terms between two and five year years. The pay rate starts at 1.10 and you’ll repay your loan on a monthly basis. To qualify for an equipment loan, you’ll need a credit score of at least 600, at least six months of business history, and $250,000 or more in annual revenue.
If you earn sufficient revenue and need to buy new equipment or upgrade your current equipment, an equipment loan from National Funding can be a solid pick. You can get approved without good credit or a down payment.
For farmers with high loan needs, Biz2Credit offers some of the highest borrowing amounts for borrowers with good credit. With over 200,000 small businesses funded, Biz2Credit has demonstrated a strong commitment to all types of businesses.
Main Features Biz2Credit offers three types of loans to farm businesses: term loans, working capital loans, and commercial real estate loans. Term loans range from $25,000 to $500,000 with terms ranging from 12 to 36 months. Working capital loans range from $25,000 to $2 million, and commercial real estate loans can be as high as $6 million. To qualify with Biz2Credit, your credit score will need to be at least 575 if you’re looking for a working capital loan or 660 for longer-term, large loans. Your farm will also need a yearly income of at least $250,000, and you’ll need to have been in business for six months for working capital loans and 18 months for term and CRE loans.
For larger scale farmers, Biz2Credit offers the most options. Their application takes just minutes, and you could see your funding in your account in just 72 hours. Just make sure to read the fine print before accepting the loan offer. One of the biggest (but only) complaints about Bz2Credit is the higher interest rates and fees compared to their competitors.
Torro provides startup business loans and working capital loans for businesses in existence for at least six months. Their application process is straightforward and requires very little paperwork. If your dream has been to finally start your farm or continue to grow an existing farm, Torro can help.
Main Features Torro offers up to $125,000 for farmers looking to get into the business. Terms range from 12 to 48 months and Torro would like to see a credit score of at least 700 for this type of loan. In addition to credit, you’ll need to show a maximum monthly revenue of $5,000. Since this is a startup loan, your length in business won’t matter as much as other types of lending products available. For farmers already in business, you can secure up to $575,000 if you’ve been in business for at least six months and make $120,000 or more yearly. Torro doesn’t directly state what credit score you need, since it’ll vary, but they’re more lenient than some of their competitors.
Torro is an excellent option for those with poorer credit, so while they may have high interest rates, their easy application and fast loan turnaround can make up for that. Farmers just starting out will also appreciate Torro’s straightforward startup loans.
Fundbox offers lines of credit for farmers that only want to borrow money when needed, rather than having regular loan payments (although they do offer term-loans, as well). With a line of credit, you only pay interest on the amount you borrow, and once you pay it off, you can use it again. Fundbox prides themselves on making the borrowing process painless and easy, and the funds can be deposited in your account in as little as one business day from loan approval.
Main Features With Fundbox, you can get a line of credit up to $150,000. Terms are 12 or 24 weeks for each draw, and rates start at 4.66% for 12-week terms. To qualify, you’ll need to have an annual revenue of $100,000 or more. Like many of the options on this list, you will need to have been in business for at least 6 months. The minimum credit score required is 600, so farmers with average credit should qualify. Of course, the higher your score, the lower your interest rate. Here are 8 ways to build your business credit.
Lines of credit can be more manageable for busy farmers, since you can simply login to your account and draw money straight from your dashboard and it’ll be deposited into your business checking account. Fundbox also promises an easy loan experience on the horizon soon.
Loan features - This includes the maximum amount you can borrow and how long you have to pay the loan back.
Application process - How long does it take to apply for the loan? Does the lender do a hard-pull or soft-pull on your credit? What documentation do you need to provide?
Interest rates and fees - Even though you might think a loan comes with the perfect repayment terms, consider all of the costs involved in taking out a loan. You’re not just paying the dollar amount you borrowed, you’ll pay origination fees, interest on the loan, and any other fees a lender has.
Qualification process - Lenders will look at your credit score, time in business, and annual revenue when deciding if they should approve you for the loan.
Customer support - If you ever need help with loan payments, having a responsive customer support team can make the situation much better. When looking into a lender, see what customer service options are available. Is it just by phone or can you email as well? Make sure there’s an option you’re comfortable with.
Online user reviewsThe best way to get a sense of a company is to read their reviews. When comparing lenders, find out what their TrustPilot and BBB reviews are, so you can see how others like you have fared.
Perks and bonuses - Some companies will offer incentives to make them stand out from their competitors. For example, FundBox offers a Flex Pay option that gives you a few extra days to pay your bill. Consider how much these extra perks mean to you before making a final decision.
Main Features of The Best Farm Loans
Min. Credit Score
Min. Time in Business
$25,000 - $6 million
Up to $400,000
$10,000 - $2 million
700 for startup loans
Maximum $5,000 per month
Up to $125,000 for startup loans
Up to $150,000
Starting at 4.66%
What Is a Farm Loan?
A loan for farm businesses is financing offered by lenders to farmers who can use the money for farm-related expenses. Whether you’re looking to purchase, grow, or need cash flow to keep your farm operating, farm loans can help.
Beginning Farmers and Ranchers Loans - These loans help first-time farmers finance a farm. You’ll need to meet specific requirements in order to qualify as a beginner farmer.
Emergency Farm Loans - If your farm has been damaged or destroyed due to a natural disaster, these emergency loans can help you rebuild.
Farm Operating Loans - Farms have high yearly operating expenses. These loans can help keep your farm going when you don’t have the cash upfront.
Farm Ownership Loans - If you want to expand your farm, these loans can help you get the extra land you need.
Guaranteed Farm Loans - You’ll typically find these loans through commercial lenders like the ones in our list. Guaranteed loans can come in smaller amounts or be larger loans that help you keep your farm operating.
Microloans - Microloans are small loan amounts with quicker repayments. They’re best for niche farmers or smaller farms that need more specific types of funding.
Minority and Women Farmers and Ranchers Loans - These loans support farmers from minority or underserved communities, and can help them find ownership and guaranteed loans.
Native American Loans - Native American tribal members can use these loans to expand their agricultural needs.
How to Get a Farm Business Loan
The lenders on this list are a great place to start, but compare as many lenders as you need to get a sense of which lenders will work best with your financial situation. Each lender will offer different interest rates, loan amounts, and benefits to borrowers.
Only go with lenders whose requirements you meet
Loan lenders aren’t apt to take applicants that don’t meet their requirements, so it’s not worth your time to apply. You’ll increase your chances of approval by only focusing on companies that are likely to grant you a loan.
Make sure your credit is where it needs to be
Having a good credit score qualifies you for the best rates, the highest loan amounts, and the best discounts. If you have subpar credit, consider taking the time to focus on improving it before applying for loans.
Prequalify, if possible
Some companies allow you to prequalify so you can see if it’s worth submitting a full application. Prequalification comes with a soft credit check, which means your score won’t be affected, so it’s always worth doing if you can.
How Can You Use a Farm Loan?
Farm loans can be used to support most operations on a farm. Many loans are flexible, meaning you can use them for just about any legal purpose associated with your business.
The main uses of a farm business loan include:
Start a farm - Startup loans are common among business loan lenders. Often, these come with lower loan amounts than loans to help farms already in operation, but they can be a big source of financing at the beginning of your farming journey.
Purchase or repair equipment - Farming equipment comes at a high cost, so it can be difficult to repair or completely replace equipment without a loan.
Purchase livestock - If you’re in the business of cattle farming (or any other livestock), you can use a farm loan to purchase additional heads of livestock if the need arises.
Hire extra workers - Farms rely on seasonal and migrant workers more so than other industries, and many farmers need to hire many workers at once. It can be difficult to truly get the help you need, but farm loans can help you employ the right people at a fair price.
Farm loans come in a variety of types that support different farmers. Whether you’re a beginner farmer or a seasoned farmer looking to continue growing your business, a farm loan could work for you. The companies on our list offer different loan amounts and credit requirements, so most farmers should be able to qualify through at least one lender.
Frequently Asked Questions(FAQ)
Is there a minimum acreage needed for a farm loan?
If your hobby farm is a business that meets minimum income requirements of lenders (typically over $100,000/year), you should be able to qualify for a loan. Small-time operations that provide less income should consider other loan options, such as personal loans or home equity loans.
What is the difference between a farm loan and a farm line of credit?
Traditional farm loans can be government-backed or they can be private loans that come with a set repayment schedule and interest rate. Farm lines of credit, on the other hand, are offered by private lenders and allow you to draw on credit as-needed rather than taking out a lump sum loan.
How do I finance buying a farm?
Many of the companies on this list offer startup loans that can help you start a farm. In addition, the FSA offers the Direct Farm Ownership Down Payment Loan to help beginner farmers. You’ll need to meet a few requirements, including not owning or operating a ranch or farm in the last 10 years, as well as credit requirements.