Finimpact

Best Farm Loans

Farm loans help farmers keep their businesses running by providing capital that allows them to replace equipment, fund startup costs, or hire more workers. However, it can be difficult to qualify for the loan you need if you don’t meet certain income and credit requirements. Our expert guide can...

Best Farm Loans
Christopher Murray
Personal Finance Expert

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 very expensive equipment to run their businesses. The best farm loans provide relief when equipment breaks, when farmers need to secure more land, and so much more. Luckily, agricultural business loans are offered by a number of different lenders.

Our Top Picks for Best Farm Loans

biz2credit review
  • Multiple loan types available
  • Funding in 48h
  • Soft credit pull
credit score
Min. Credit Score 600+
loan amount
Loan Amount $25K - $6M
loan repayment
Loan Repayment 12-36 months
forafinancial
  • Ideal for plenty of industries
  • Approval not solely credit based
  • Early payoff discounts
Credit Score
Min. Credit Score 550+
Loan Amount
Loan Amount $5K-$750K
Loan Repayment
Loan Repayment 4-15 months
Torro review
  • Hundreds of financing options
  • Use the loan for any purpose
  • Fast process
min credit score
Min. Credit Score 680+
loan amount
Loan Amount Up to $575K
Loan Repayment
Loan Repayment 12 - 48 months

How to Choose the Best Farm Loan

When it comes time to choose the right loan for your farm, you’ll want to consider things from all angles. Take into consideration the following:

  • Loan features - You’ll want to make sure your lender of choice offers the loan amount you're looking for and has repayment terms you can realistically meet.
  • Application process - Before hitting the “apply now” button on any lender’s site, look into what you’ll need to provide. Some lenders have more rigorous application processes than others.
  • 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 - Many lenders choose to only work with borrowers who have good credit or meet certain business requirements. Make sure you can meet these requirements before applying.
  • Customer support - If you ever need help with loan payments, having a responsive customer support team can make the situation a whole lot 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 reviews - The 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.

Best Farm Loans for 2022 - Full Overview

1. Biz2Credit - best for larger loans

For farmers with high loan needs, Biz2Credit offers some of the fastest and generous loan options for borrowers with good credit. With over 200,000 small businesses funded, Biz2Credit has demonstrated a strong commitment to all types of businesses.

Pros
High loan amounts up to $6 million
High customer ratings
Three loan types that cover many uses
Simple application process
Cons
You’ll need a high credit score to secure a loan
Not upfront about all the fees they charge


Before considering Biz2Credit, check to make sure your credit score is 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 6 months for working capital loans and 18 months for term and CRE loans.

The Bottom Line

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.

2. Fora Financial - best for quick turnaround loans

Fora offers a large loan range with quick turnarounds and no collateral required. Plus, they don’t just take your credit into consideration when you apply. Instead, your positive business history as a farmer can help you qualify for the right loan.

Pros
Get an approval decision in 24-hours
You can qualify for a discount when you pay your loan off early
Small and large loan options
Cons
Short-term loans can come with high fees
You’ll pay additional fees on top of your APR


Fora has quite a wide range of loan amounts ($5,000 - $750,000), and you’ll find they’re fairly open minded when it comes to the credit score of their applicants. In fact, your credit score won’t even be affected when you apply. As for revenue requirements, Fora asks for a minimum of $12,000 in gross sales each month.

The Bottom Line

For quick turnaround loans with short repayment terms, Farmers should seriously consider Fora. However, if you need longer than 15 months to pay back your loan, Fora may not be the right option. In general, Forna is a reputable company that offers farmers an easily securable option for their farming needs.

3. Torro - best for smaller income businesses

Torro offers straightforward loans for new startups in particular. If your dream has been to finally start your farm or continue to grow a family farm, Torro makes the process about as simple as it gets.

Pros
A large number of financing options
Little paperwork and a quick application
Can use funds to start your business
Flexible loans let you use funds however you need
Cons
Potentially high fees
Site isn’t as user friendly


Torro offers up to $125,000 for farmers looking to get into the business. For farmers already in business, they can secure up to $575,000 if they have been in business for at least 6 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 definitely more lenient than some of their competitors.

The Bottom Line

Torro is an 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.

4. Fundbox - best for lines of credit

Fundbox offers lines of credit for farmers that only want to borrow money when needed, rather than having regular loan payments (although they are working on long-term loan options). Fundbox prides themselves on making the borrowing process painless and easy.

Pros
Get a credit decision in just a few minutes
Draw money straight into your business account
Flex pay allows you 3 extra days to pay
Cons
Only Premium members secure the best features
No loan option as of yet
At least average credit score required


With Fundbox, you can get a line of credit over $100,000, but you’ll need to have an annual revenue of $100,000 at least. 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, so higher credit borrowers will fare better.

The Bottom Line

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.

5.Credibly - best for low credit borrowers

Credibly provides lower credit business owners, farmers included, with a few different loan options to choose from. If you’ve been denied loans in the past, Credibly wants to be the lender that can finally help.

Pros
Easily prequalify online with just a soft credit pull
Potential for same day funding
Get approved even with a lower credit score
Cons
Low credit borrowers will have high interest rates
Daily or weekly payments may be required


Credibly offers farmers loan amounts of $5,000 - $400,000, which can be used for buying or repairing equipment, hiring additional workers, and any other business-related expense. You’ll need to prove that your farm has a yearly income of at least $180,000, and you’ll need to have been in business for at least 6 months.

Credibly does take your credit score into consideration when looking at your application, but they look at your business’s overall financial health to determine approval. Your credit score will play a role in the interest rate you secure, though. Credibly rates begin at 9.99%.

The Bottom Line

For farm owners looking for short or long-term loans, Credibly is a worthy option to consider. Even if you don’t have a stellar credit score, you do still stand a good chance at being approved. Plus, Credibly focuses on making their loans flexible so you can use them for almost any farm expense you may have.

Best Farm Loans - Features Comparisons

Company
Min. Credit Score Min. Time in Business Min. Annual Revenue Loan Amount
Interest Rate
Biz2Credit 575 -
660 depending on the type of loan
6 - 18 months depending on the type of loan $250,000 $25,000 - $6 million Varies based on your credit score, loan type, among other factors
Fora Financial None listed, they base their decision on your full financial picture 6 months $12,000/ month of gross sales $5,000 – $750,000 Varies based on your credit score, loan type, among other factors
Torro It’s a bad credit lender, so many can qualify even with a lower score 6 months for working capital loans $120,000 for working capital Up to $125,000 for startup loans; up to $575,000 for business already in business Not disclosed until application
Fundbox 600 6 months $100,000 Line of credit up to $150,000 4.66% for 12 Week Terms and 8.99% for 24 Week Terms
Credibly 500 6 months $180,000 $5,000-$400,00 Starts at 9.99%

What Is a Farm Loan?

A farm loan is financing offered by lenders to farmers who can use the money for most farm-related expenses. Whether you’re looking to purchase, grow, or need cash flow to keep your farm operating, farm loans can help.

Types Of Business Loans For Farms

Farmers can access loans through the U.S. Department of Agriculture Farm Service Agency. They provide different loans, including:

  • 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 - Operating a farm costs big money each year. 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 - As you can likely guess, microloans are small loan amounts with quicker repayments. They’re best for niche farmers or smaller farmers 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 Loan?

Compare lenders

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 picture. 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 makes you royalty in the loan world. You’ll qualify 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, like Credibly, for example, 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 it won’t be affected, so it’s always worth doing if you can.

How Can You Use Farm Loans?

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. Here are a couple of uses:

  • Start a farm - Startup loans are common among business loan lenders. Often, these come with lower 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 head 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 a lot of 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.

Conclusion

Farm loans come in a variety of types that support different farmers. Whether you’re a beginner 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?
There isn’t necessarily a minimum acreage needed, but there is a maximum for startup loans. FSA loans require applicants to not own more than 28.2 acres to be classified as a beginning farm. Lenders will have their own requirements, though, which you should find out during the application process.
Can I Get a Loan for a Hobby Farm?
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 Credit?
Farm financing can be government-backed or private loans that come with a set repayment schedule and interest rate. Farm credit, or farm lines of credit, on the other hand are offered by private lenders that allow you to draw on credit as needed rather than taking out a lump sum loan.
How to 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.

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