Today, there are about 2 million farms in operation in the US, a steep decline from 1935, when the number of farms peaked at nearly 7 million. Yet is a vital sector of our economy.
How much does it cost to start a small farm? Starting cost of a small farm are between 600-10000$ and more. The cost greatly depends on your expectations, equipment, how much manual labor and time you want to put into it, and if you already own a property or just want to rent one. In addition farmers need financing for their daily operations.
Agricultural finance is the provision of multiple types of services dedicated to supporting both on- and off-farm agricultural activities and businesses including input provision, production, and distribution, wholesale, processing and marketing. Agricultural finance enables farmers to get best agricultural production by providing timely inputs required agricultural production. For Production of any crop four major factors of production are used i. e land, labour, capital, and management.
5 Types of Agriculture Loans
- Agriculture loans are commonly supplied by the Farm Service Agency (FSA) of the United States Department of Agriculture (USDA).
- Farm Storage Facilities Loans.
- Farm Operating Loans.
- Farm Ownership Loans.
- Fisheries Finance Program.
- Farm Labor Housing.
Main funding sources
- Local banks.
- Private contracts and Private Lenders.
- Farm Credit Services “Young & Beginning” Program.
- USDA Beginning Farmer Loan Programs. USDA Farm Service Agency (FSA) is the traditional lender of last resort and has its roots in providing funds to beginning farmers.
Farm Loan Requirements
- Minimum Credit Score: 660 (at least one of the three major bureaus)
- Minimum Loan Amount: $400,000.00.
- Minimum acreage (unless permanent planting operation): 40 acres.
- Location: Property must be located within the lower 48 United States.
- Income: Must have sufficient income to service all debts (personal and business)
Through the USDA’s Sustainable Agriculture Research and Education Program (SARE) farmers and ranchers can apply for grants that typically run between $500 and $15,000 for various projects.
If you have a Farming related business or any other small business within a farming area in the United States, contact First Down Funding for any financing needs and we can provide you with options available for your business.
This post was written by fdfadmin