A Beginner’s Guide to Farm Financing

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(Newswire.net — December 16, 2021) —

You’ve always dreamed of starting a farm. However, due to the high cost of doing so, you’ve never been able to make it a reality. 

Nonetheless, your dream lives on, and so, you’re wondering: is there financing available for farming? There is, and we’re going to discuss it all in detail below.

Here is the beginner’s guide to farm financing. 

USDA Loans

In the United States, the USDA provides a wide variety of loans for farmers to take advantage of. These loans include the following. 

Farm Ownership Loans

Looking into financing a farm purchase? Maybe you’re hoping to expand your existing agricultural space? If so, a farm ownership loan from the USDA could be a giant help to you. 

Farm ownership loans cover everything from land to the construction of farm buildings to the renovation of farm buildings to land conservation efforts and more. They’re available to both new and existing farmers and can go a long way in helping farms to succeed. 

Operation Loans

Another type of loan that you can get from the USDA is an operation loan. Operation loans help pay for livestock, seeds, and farm equipment. They can also serve as steady income in the early days of a farm’s existence, helping the farm owners to get by. 

If you need help with the everyday operations of running your farm, obtaining an operation loan is something you should consider. It can help you to scale your farm and to make it through rough times. 

Storage Loans

The USDA also provides storage loans. A storage loan helps pay for things like grain silos, garages, barns, and the like; anything that helps with the storage of items on the farm. 

Let’s say you need a way to preserve crops after they’ve been harvested. A storage loan would help you to purchase refrigerated storage, for instance. 

Beginning Farmer Loans

If you’re in the early stages of your farming endeavor, you could take advantage of a beginning farmer loan. These loans are available to those who haven’t owned a farm in 10 years or more. Note, though, that in order to get one, you’ll have had to put 3 years into farming in some other capacity, say, on someone else’s farm. 

This is one of the best types of financing available to new farmers. It’s fairly easy to obtain and comes with reasonable interest rates. 


Another type of loan that can help out new farmers is the microloan. Microloans cover small expenses that new farmers come across, such as the cost to buy a necessary piece of equipment or the cost to purchase livestock. Microloans can also be used for marketing and startup costs as well as for things like farm management software. 

The good thing about microloans is that they have very loose requirements. Therefore, most farmers can obtain them with ease. Note, though, that they only go up to $50,000, meaning that they won’t cover the entire cost of a farm’s startup expenses. 

Additional Loans

There are a variety of additional agricultural loans provided by the USDA, including loans for young farmers, loans for Native American tribes, and loans for minority and female farmers. 

To find out more about these loans, visit the USDA website and search for the Farm Service Agency. This is the agency that handles all of this financing. 

State/Local Agricultural Financing Programs

In addition to loans from the federal government, you might also be able to get a farm loan from your state or local government. These are provided through specific programs that allow new and inexperienced farmers to sink their teeth into their farming endeavors. 

The best way to find these loans is to search for them on Google or another search engine. For instance, if you live in Ohio, search something to the effect of “Ohio agricultural loans”. This will return a list of different websites, many of which will include loan details. 

You should also search for your county and your town/city. So, if you’re in, say, Allen County, Ohio, you should search “Allen County Ohio agricultural loans”. You just might find a form of financing that’s more appropriate for you. 

Conventional Lending

There are a number of conventional lenders that will provide financing to farmers as well. Note, though, that, in most cases, to obtain this financing, you need to have a successful farm already established. In addition, you need to be able to show proof that the loan will reap you additional income in the future. 

In other words, conventional lending isn’t usually an option for beginners. It’s for seasoned farmers who are looking to expand their operations in some manner. 

If you’re interested in pursuing conventional lending, you should start by asking around to banks in your area. If that doesn’t turn up any results, go to Google and type in something to the effect of “agricultural loans”. There are many options available online. 

Credit Cards

For smaller purchases on the farm, it might be handy to have a credit card around. Any business credit card would suffice. However, as a farmer, it wouldn’t be a bad idea to obtain an agriculture-based credit card. 

Getting a credit card for farmers will likely provide you with special features, including larger lines of credit and maybe even lower interest rates. The key is to shop around and find a card that meets your needs. 

Farm Financing Could Make Your Dream a Reality

If it’s a farm you want, farm financing could make the difference for you. Read into the different types of financing discussed above and you’re sure to find the funding you need. 

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