What You Need To Know About Farm Loans


By Brandon Redmond

Twin Falls, Idaho ( KMVT-TV / KTWT-TV ) Farm season is just around the corner. If you need a little extra money to get a jump start on the season, there are a few things you should know about farm loans.

"Farm loans could come in maybe three different forms. Operating lines of credit or your year to year operating needs," said Don Maier, D.L. Evans Vice President.

Operating lines of credit loans are common in the spring before the upcoming planting season. If you are looking at a loan, the bank will need you to bring a few things with you.

"Financial statements for three years and a budget. We have to know what our needs are going for because if we loan for operating needs, they are for specific line items. So tax returns, financial statements and budgets are what we need to get started with," said Don Maier, D.L. Evans Vice President.

If there is some equipment you need help purchasing, banks also offer farm term loans.

"Term loans are generally for equipment purchases, three to five year maturities or paybacks. Those are shorter term than real estate loans but longer term than an operating line of credit," said Don Maier, D.L. Evans Vice President.

The last type of farm loan offered by banks is for purchasing real estate.

"The farm real estate is generally based off the real estate itself. The cash flow comes from the crops that are generally growing on that farm or other related farms within that entity. Farm real estate is generally what that farmer's purchasing to grow his crops on," said Don Maier, D.L. Evans Vice President.