If you’re looking to expand, modernize, or enhance the environmental sustainability of your agribusiness, a farm improvement loan could provide you with the capital you need. Offered by many financial institutions as well as the USDA Farm Service Agency (FSA), these are specialized loan solutions that are aligned with the unique needs and goals of farmers and ranchers and their variable revenue cycles.

These loans often come with lower rates, longer terms, and more flexible collateral requirements than generic business financing products. Here is a quick overview of farm improvement loans and how your business can use them to stay competitive.

How Can You Use Farm Improvement Loans?

The most common use is for the construction or repair of essential farm facilities like barns and silos. Farm improvement loans can also be used to purchase vehicles and machinery, invest in renewable energy infrastructure like solar panels and wind turbines, or deploy new technology like drones and GPS-aided precision agriculture systems.

Who Is Eligible for Farm Improvement Loans?

Requirements vary based on institution and region; however, most lenders need proof of a strong credit history, a well-developed business plan that demonstrates industry know-how, and sufficient cash flow to cover monthly payments. In terms of collateral, most farm improvement loans are secured by farmland or other fixed assets, while some may let you put up livestock or standing crops.

What Are the Benefits?

Farm improvement loans can empower agribusinesses in numerous ways. For example, modernization can increase yields and reduce labor costs, and upgraded facilities can promote animal well-being and worker safety. In turn, investments in green practices can support long-range viability, and responsive technologies can mitigate climatic fluctuations.

How Can You Boost Your Chances of Approval?

To secure a farm improvement loan with favorable terms, be sure to include industry successes and financial projections in your business plan. And of course, maintain solid credit by paying your bills on time and keeping balances low. It helps to work with a lender with proven experience in the agricultural sector. And don’t forget to explore government-backed loans if you don’t qualify for traditional options.

This is only the start of the discussion. Reach out to our expert team for more info on farm improvement loans and other powerful tools for investing in the future of your agricultural operations.