Farm loans can help farmers buy or replace equipment, expand their operations, or carry them through an emergency or economic downturn due to a bad season. In fact, according to the Farm Service Agency (FSA), farm operating loans exceeded $5.7 billion in 2019, the third-highest in the agency’s history.
We looked at over a dozen agriculture lenders for this review based on experience, funding options, competitive rates, lending requirements, and more. Here are our top six choices.
The Best Farm Loans for 2021
Best Overall : Farm Credit Mid-America
Why We Chose It: Farm Credit Mid-America offers a variety of farm loan and financing options with conversions, pre-approvals, and flexible payment options.
Seven loan and financing options available
Quick application for loans under $75,000
Representatives will come to customers
Only available in Indiana, Ohio, Kentucky, and Tennessee
An affiliate of Farm Credit, Farm Credit Mid-America offers farm loans and other financing options for farmers in Indiana, Ohio, Kentucky, and Tennessee. It’s our choice as the best overall since it offers a variety of convertible long- and short-term farm loans and equipment financing.
Farm Credit Mid-America offers six agriculture real estate loan programs, including fixed-, adjustable-, and variable-rate loans. Terms are generally available from five to 25 years with options to convert loans to lower rates when they become available.
Farm Credit Mid-America also offers auto-renewing operating loans with competitive rates, short-term loans with a quick-apply option for loans under $75,000, equipment and facility leasing with flexible payment options and no down payments required, and farm cash management investment accounts that pay down loans and move excess funds into an investment account.
In addition to farm loans and other financing options, Farm Credit Mid-America also offers crop insurance, online banking tailored to the needs of farmers, and a rural lending program. The company also advertises that it has representatives in over 100 locations that will travel to farms to discuss lending goals and terms with its clients.
Best for Low Down Payment : Farm Credit Services of America
Why We Chose It: Farm Credit Services of America is a commercial lender that partners with the FSA to guarantee the agency’s low down payment Direct Farm Ownership Loans.
Fixed-rate low-payment loans
Flexible payment schedules
Low or no down payment agricultural leases
Only available in Iowa, Nebraska, South Dakota, and Wyoming
Farm Credit Services of America is a customer-owned financial cooperative that provides credit and insurance services to farmers, ranchers, and agribusinesses in Iowa, Nebraska, South Dakota, and Wyoming. It’s our choice as the best for a low down payment because it can be used to make down payments of the FSA’s Direct Farm Ownership Down Payment Loan.
The FSA’s Direct Farm Ownership Down Payment Loan requires borrowers to contribute a 5% down payment on the purchase price of a farm and will finance 45% to a maximum loan amount of $300,015. While the remaining 50% of the purchase price is usually funded by a commercial lender, Farm Credit Services of America is one of the few companies that can also offer a loan for the 5% down payment.
Farm Credit Services of America offers a variety of funding options including lines of credit, real estate loans with cash-back dividends, facility loans, leasing options, and equipment financing. The company also offers specialized loan programs for young and beginning farmers. Applicants must be 35 or younger with 10 years of experience or less and no more than $250,000 of annual farm income.
Best for Bad Credit : AdvancePoint Capital
Why We Chose It: AdvancePoint Capital is a general business lender that offers agricultural and farm business loans including short-term loans with easier approval qualifications than that of lenders.
Loans available for borrowers with poor credit
One-page online application
Unlimited use of money with no limitations
Maximum loan amounts of $500,000
Not a dedicated agriculture lender
AdvancePoint Capital offers a variety of business financing options with a simplified application process, fast approval, and flexible approval qualifications, making it the best for bad credit. It considers all types of credit, from Excellent to Poor, for its short-term loans and can run a pre-approval check with no hard credit pull. These loans are issued for a fixed term between six to 18 months with a fixed factor. In addition to agricultural loans, the company offers business lines of credit, cash advances, invoice financing, and more.
AdvancePoint Capital offers several farm financing options, including long- and short-term loans, business lines of credit, equipment loans, SBA loans, invoice factoring, purchase order financing, and business credit cards.
The company’s short-term business loans can be used for nearly any farm expense, including working capital and expansion. It also features a fast application process with limited paperwork, quick processing times, and same-day to 24-hour funding.
There are a few disadvantages of using AdvancePoint Capital, however. As a non-agriculture lender, it can’t guarantee any FSA loans. The company also only offers loans up to a maximum of $500,000.
Best Line of Credit : AgAmerica Lending
Why We Chose It: AgAmerica Lending offers a 10-year line of credit that lets farmers apply once and make unlimited cash draws for any business purpose.
No annual renewal paperwork
Interest-only payments and 25-year amortization
Option to convert to a term loan
Borrowers must own or plan to buy 25 acres
Minimum credit score of 680 required
Not available in Nevada
AgAmerica Lending offers a variety of custom agricultural loans for over 15 types of crops and commodities, including cattle ranches, timberlands, dairy farms, peach farms, poultry farms, and more. The company takes our spot for the best line of credit due to its 10-year line of credit that can be used for any business expense with no mandatory pay-downs or rest periods.
AgAmerica Lending’s 10-year line of credit gives farmers a revolving line of credit they can qualify for once and draw upon year after year without any additional paperwork. The line of credit has no mandatory paydowns or rest periods, can be used for any business purpose, and offers interest-only payments.
AgAmerica Lending’s line of credit can also be converted into a term loan or packaged with another term loan for a low blended rate. Borrowers can also pay off their loan early with no penalty. AgAmerica Lending also offers 30-year fixed mortgage options and a dedicated team that works with each borrower every step of the way. The lender operates in every state except Nevada.
Best for New Farms : Farm Plus Financial
Why We Chose It: Farm Plus Financial offers real estate farm loans and a line of credit and is backed by a team of farm lending specialists who can help guide startup farmers in making sound financial decisions.
Loans for part-time farmers and commercial farms
Help from experienced farm lenders
Loans amounts from $400,000 to $25 million
30% down payment and at least 30% equity in property required
Minimum credit score of 660 required
Not available in North Dakota
Founded in 2007, Farm Plus Financial offers farm, ranch, timber property and financing for wineries & vineyards in 49 states The company’s national reach and team of lenders experienced in the farming business makes it our choice as the best for new farms.
Farm Plus Financial provides farmers with an option of a revolving line of credit and 15 types of real estate farm loans, including standard and commercial farm loans as well as loans for part-time farmers. Unlike a traditional bank, however, the company’s representatives have extensive knowledge of farming saving new farmers time and money with their expertise.
Farm Plus Financial also has stringent eligibility requirements. Borrowers must have a minimum credit score of 660, at least 40 acres, and operate in one of the lower 48 states (the lender doesn’t offer loans in North Dakota). Borrowers must also have a minimum down payment of 30%, at least 30% equity in their property, and a 60% debt-to-asset ratio.
On the plus side, Farm Plus Financial's loans offer terms from one month to 30 years fixed with amortizations of 15, 25, and 30 years. The minimum loan available from the lender is $400,000 and the maximum is $25 million giving farmers of all sizes plenty of room to grow.
Best Emergency Loan : American Farm Mortgage & Financial Services
Why We Chose It: American Farm Mortgage & Financial Services offers a variety of agriculture financing including express loans available within a few hours that can be used for any business expense, including emergencies.
Expedited loans in as little as a few hours
Available in all 50 states
Flexible repayment options
720 credit score required for express loans
Founded in 1989, American Farm Mortgage & Financial Services offers a variety of agriculture and FSA guaranteed loans for established and beginner farmers. The lender’s express loans give qualified borrowers access to funds in a little as a few hours with no restrictions on use, making it our choice as the best for emergencies.
American Farm Mortgage & Financial Services AgXpress loans offer up to $1.5 million in funding for borrowers with a minimum credit score of 720. Minimal paperwork is required to apply for an express loan and approval takes place within a few hours to one day. Best of all, borrowers can choose fixed, variable, and adjustable rates to suit their needs with no restrictions on the use of funds.
American Farm Mortgage & Financial Services also offers agriculture loans with terms up to 30 years with adjustable rates and flexible payment options; beginning farmer loans with competitive rates; and FSA guaranteed loans up to $1,776,000 with amortizations up to 30 years, fixed and variable rate options, and flexible payment terms.
It’s important to note that American Farm Mortgage & Financial Services has high credit requirements for most of its loans as well as maximum debt-to-asset ratios of 50% and ownership and property size restrictions.
If you need a farm loan, there are several options for you to choose from based on your location, needs, budget, and the type of farm you own. Make sure to check the rates and terms and conditions of any loan, including the monthly repayment amount and length of the loan, before accepting it.
While there are many top farm loan providers on the market, Farm Credit Mid-America topped our list due to its broad selection of loans, conversion options, and representatives willing to travel to farmers to discuss funding options.
|Lender||Category||Why We Picked It|
|Farm Credit Mid-America||Best Overall||Wide selection of convertible farm loans and financing|
|Farm Credit Services of America||Best for Low Down Payment||Down payment loans available for FSA loans|
|AdvancePoint Capital||Best for Bad Credit||Quick-application and loans for borrowers with poor credit|
|AgAmerica Lending||Best Line of Credit||10-year line of credit with no renewal or paydown|
|Farm Plus Financial||Best for New Farms||Flexible loans and lenders experienced in farming|
|American Farm Mortgage & Financial Services||Best Emergency Loan||Express funding available within a few hours|
Frequently Asked Questions
What Is a Farm Loan?
A farm loan is a specific type of loan that can be used for nearly any farm expense, including startup costs, expanding facilities, buying livestock, leasing equipment, and running day-to-day operations. In addition to loans, lines of credit are also available allowing farmers to make purchases as needed without having to reapply for funds.
Farm loans are available from the FSA and commercial lenders.
Why Would Someone Need a Farm Loan?
Farm loans might be needed to help farmers lease new equipment to expand their operations or replace aging equipment. They can also be used to purchase additional acreage or new livestock, hire extra hands during harvest, or just to have cash available during lean times or for emergency expenses.
Is There a Minimum Acreage Needed for a Farm Loan?
While the FSA loan states that a farm must be no “greater than 30% of the average size farm in the county” to be considered a beginning farm, commercial lenders often have their own requirements. In our research, we found lenders who would only fund farms at least 25 acres in size and others 40 acres or larger.
Can I Get a Loan for a Hobby Farm?
A hobby farm is defined as a small-scale farm primarily used for pleasure and that does not provide the primary source of income for its owner. Although we didn’t review any agriculture lenders specifically offering hobby farm loans, many general commercial lenders do offer them.
Hobby farm loans typically have low (five to 10) or no acreage requirements, a minimum of $100,000 in funding, and require borrowers to have no history of bankruptcy and a credit score of at least 680.
What Is the Difference Between a Farm Loan and a Farm Credit?
A farm loan is issued by a commercial lender with options, rates, and terms that vary by each lender. A farm credit is a type of financing offered by the Farm Credit System (FCS), a cooperative network of 71 customer-owned financial institutions in all 50 states and Puerto Rico.
As a borrower-owned and -controlled financial institution, FCS offers its borrowers stock in the co-op giving them a vote and a voice in how it is run. The organization raises funds through the sale of debt securities and offers agriculture leasing programs, crop insurance, accounting tools, cash management services, and more.
How We Chose the Best Farm Loans
We looked at over a dozen farm loans for this review. We began by looking at lenders with a strong history in the agriculture industry. Flexibility was also key since farmers often have a variety of needs that require specific funding options.
We also made sure to include lenders that specialized in different needs, such as new farms, borrowers with poor credit, or those that required low down payments. Lenders that also offered FSA guaranteed loans were also high on our list since the agency recommends moving from FSA loans to commercial lenders.