Commercial Financing Options for the Agriculture Industry

Every business needs to have financing options to help it run smoothly. This is as true in the agriculture business and in any other industry. Whether running a farm, ranch, orchard, feedlot or any other type of operation, you likely need help with paying for major expenses and ensuring consistent cash flow. This industry is even more seasonal than most, so having the right lender to work with is important.

Uses for Financing

If you have a farm, for example, you may wonder what you can use financing for. The good news is that there are options to help pay for just about every type of business expense. These are a few examples:

• New Technologies: Technological disruption can change the nature of the industry rapidly. Businesses today use new equipment and technologies that help them be more efficient and reduce expenses. This could range from software to help with better planning your business to new equipment that lets you do more with less labor.
• Marketing: If you want to grow your business, you need to attract customers and make sales. Marketing and advertising can be powerful tools, but they require an investment if you want to do them right. For example, you could pay for an ad to be displayed on a local industrial site. For larger operations, you may need to hire someone to help you sell your product.
• Working Capital: Every business has expenses and sometimes covering them all can be challenging. If the seasonal nature of your business can cause problems, consider getting a line of credit or working capital loan. This will help you borrow money when you need it to cover key expenses such as supplies and payroll.

Options for Financing

There are numerous loan types that you could use to help fund your business. Some are government-backed, others are from banks and some are from private lenders.

First, consider going to the USDA or SBA for a loan. These typically have the best terms and loan amounts. They may be harder to qualify for than some other options, however.

Your bank may also be willing to extend a business loan. These typically also come with good terms but strict qualification requirements. If you are having trouble finding financing elsewhere, consider private lenders. They typically move quickly and are more flexible. However, their loans may be more expensive.

Using all your financing options can help you ensure the success of your agriculture business. Start learning about your choices today.