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Best Farm Loans to Consider in 2022
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
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 agriculture businesses provide relief when equipment breaks, when farmers need to secure more land, and so much more. Luckily, farm business loans are offered by a number of different lenders.
Our Top Picks for Best Farm Loans
- Multiple loan types available
- Funding in 48h
- Soft credit pull
- Ideal for plenty of industries
- Approval not solely credit based
- Early payoff discounts
- Hundreds of financing options
- Use the loan for any purpose
- Fast process
How to Choose the Best Farm Loan
When it comes time to choose the right loan for your farm, there are many things you’ll want to consider before signing. Luckily, our experts reviewed and analyzed many online lenders and picked out the top ones. The factors they took into consideration include:
- 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 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 Business Loans for 2022 - Full Overview
1. Biz2Credit - Best for Large Farm Loans
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.
Pros
Cons
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.
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.
Try Biz2Credit
Read more in the full Biz2Credit review
2. Fora Financial - Best for Quick Turnaround Loans
Fora Financial offers short-term loans with quick turnarounds and no collateral required. Plus, they take more than your credit score into consideration when you apply. Instead, your positive business history as a farmer can help you qualify for the right loan.
Pros
Cons
Fora Financial offers loan amounts from $5,000 to $750,000 with terms ranging from four to 15 months. Because of the low term length, Fora is best-suited for farm owners who need cash now but have the ability to pay it back quickly.
Fora Financial is 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. You also need to be in business at least six months to qualify.
The Bottom Line
For quick turnaround loans with short repayment terms, farmers should consider Fora Financial. However, if you need longer than 15 months to pay back your loan, Fora may not be the right option. In general, Fora Financial is a reputable company that offers farmers an easily securable option for their farming needs.
Try Fora Financial
Read more in the full Fora Financial review
3. Torro - Best for Startup Agriculture Loans
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.
Pros
Cons
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.
The Bottom Line
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.
Try Torro
Read more in the full Torro review
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 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.
Pros
Cons
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 >>
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.
Try Fundbox
Read more in the full Fundbox review
5. Credibly - Best for Low Credit Borrowers
Credibly provides loan options to small business owners with low credit scores. Because Credibly is both a direct lender and a loan marketplace, if they can’t offer you a loan themselves, they may be able to offer you one through one of their partner lenders. If you’ve been denied loans in the past, Credibly wants to be the lender that can finally help.
Pros
Cons
Credibly offers farmers loan amounts from $5,000 to $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 six 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, allowing you to use them for almost any farm expense you may have.
Try CrediblyRead more in the full Credibly review
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 per month | $5,000 – $750,000 | Varies based on your credit score, loan type, among other factors |
Torro | 700 for startup loans | No minimum for startup loans; 6 months for working capital loans | Maximum $5,000 per month for startup loans; $120,000 for working capital | Up to $125,000 for startup loans; up to $575,000 for business already in business | Not disclosed |
Fundbox | 600 | 6 months | $100,000 | Up to $150,000 | Starting at 4.66% for 12-week terms |
Credibly | 500 | 6 months | $180,000 | $5,000-$400,00 | Starts at 9.99% |
What Is a Farm Business Loan?
A farm business loan 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, agricultural business loans can help.
Types of Farm Business Loans
In addition to agricultural small business loans offered by online lenders mentioned above, 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 - 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
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 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?
Agriculture business 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 an agriculture 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.
Conclusion
Agriculture business 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, an agriculture 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?
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 line of credit?
How do I finance buying a farm?
Written by: Christopher Murray
Christopher Murray is a professional personal finance and sustainability writer and editor who enjoys writing about everything from budgeting and saving to unique investing options like SRI and cryptocurrency.
More about me
Reviewed by: Sarah Brooks
Sarah Brooks is a personal finance writer and editor with more than 10 years of experience. She specializes in personal and business loans, mortgages, auto loans, and credit cards.
More about me
