How Hard to Get First Time Farmer Loan

First time farmers can have a tough time qualifying for a loan. Like any business, it is hard to get financed when you don’t have a track record of sales. Luckily, we are seeing a number of options that can help you get qualified.

If you are just getting started, you may feel like you are shooting in the dark. When a bank lender asks you “What are your pro forma revenue projections?”, your answer might be “I have no idea.”

The First Time Farmer Finance Program is a tax-exempt bond program that assists first time farmers and ranchers in North Dakota to acquire agricultural property at low interest rates. See the First Time Farmer Summary for additional information on the program.

3 Steps to Get First Time Farmer Loan

We are focused on the practical, real world information that you need to launch or expand a profitable farm. Here are 3 recommendations that will help you determine how to finance your farm:

Know your goals and starting size

The challenge is in finding the right size farm for your goals. These are the questions that we often ask when we are speaking with a first time farmer:

The farmer will often spend a lot of time balancing these questions, trying to find a solution that meets all of their goals. The type of financing you choose will depend on the answer to these questions.

Demonstrate how much demand there is for your crops

When it comes to farming, it can be hard to find a good starting number for a farm investment. We recommend that you start with demand.

Most lenders or investors will want to see your marketing and sales plan. They want to know if you have someone to buy the crops.

This approach will be out of reach for most smaller growers. It is just too risky for a larger customer to lock themselves into an agreement with a new supplier.

In this scenario, there are a couple tricky decisions to make. You will need to establish a relationship with the customer early on, before you plant your crops, and try to understand their veggie preferences and volume requirements.

The market for fresh herbs is especially profitable, so in this example, we are looking for a market that is willing to buy 20 pounds of fresh herbs every week, at a wholesale price of $1.50 an ounce. That’s $480 a week in sales.

Get your financial house in order

If you are just starting out, it can be hard to qualify for a loan. If you don’t have a history of farm profits, you can try these steps to get started:

Business loans are hard to get. When you approach a lender, they will appreciate that you have started your farm with your own resources. If you have a record of sales, and you can show that there is demand for your products, your lender will be thrilled.

this will show how you intend to get your product in front of your customers. The Buyer Intention Survey can be used to demonstrate that there is a demand for your crops.

Leave a Comment