Best Farm Loans to Consider in 2024

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.

Best Farm Loans for 2024 - Full Overview

How to Choose the Best Farm Loan

• 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. 

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.

Types of Farm Business Loans

In addition to farm 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? 

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. 

Conclusion

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.