Women often take on more family and community responsibilities than men, which can lead to them missing out on growth opportunities. Financing can be a great way to help entrepreneurs overcome the most difficult challenges, particularly for women. Farm loans can be used to help jumpstart your business and propel you into new heights of growth.

Farmers can use financing to pay for startup costs, buy supplies, or upgrade their equipment. Farm loans are vital, but some women might face additional obstacles that make it harder to obtain the funds they require.

This complete guide to women’s farm loans includes information about how they work, what you can expect from the application process, and

What is a Farm Loan?

Farm loans are loans that are specifically tailored to agricultural businesses and farmers. You can use farm loans to buy land for your agricultural operations as well as other expenses like livestock and equipment.

While there are many forms of farm loans, what makes them stand out is their ability to be tailored to the needs of agricultural businesses.

The Benefits of a Farm Loan

Funding may be available to women who want to start an agricultural business or expand their existing enterprise.

You can use farm loans to purchase the land, livestock, supplies, or equipment that you need to start your business. Farm loans can also be used by farmers to hire employees, pay operational expenses, manage cash flow, or for other purposes. Unexpected expenses can be unexpected so financing is an option.

Types Of Farm Loans For Women

18% of all U.S. economic output is in the agricultural sector, with women accounting for a large portion of this vital sector. A 2019 Census of Agriculture report estimates that 36% of all U.S. agricultural workers are women, and that 56% of U.S. farms have at least one female decision maker.

Farm loans can be a crucial resource that allows women to take control of their business and reach their goals. To understand the differences between the different options for farm loans and determine which one is best for you, take the time to read through them.

SBA Loans

Small Business Administration (SBA), loans offer a variety of benefits that are exclusive to small businesses. SBA loans are government-backed financing solutions that cover a portion or all of your debt in the event of default. Lenders are given additional assurance which results in lower interest rates and better terms.

SBA loans have some of the best interest rates in the industry. The loans can also be used for operating costs and equipment financing.

SBA loans can be offered by participating lenders. These lenders could include banks, credit unions and online lenders. In addition to the requirements set by the lender, borrowers must also meet the SBA size standards. Companies must meet the following requirements:

• 
  For-profit
  
• 
  is located and operated in the United States
  
• 
  There is no outstanding U.S. debt
  
• 
  Equity must be invested by business owners
  
• 
  Property owners can’t be parole
  

SBA 7(a), SBA 504 Loans and SBA Microloans are some of the most popular business loans.

FSA Loans

The Farm Service Agency (span style=”font weight: 400 ;”>,) offers loans to farmers, ranchers and other owners of businesses in the agricultural sector.

FSA loans are flexible and easily accessible for farmers. You can use the proceeds to purchase land, livestock, seeds, supplies, equipment and other items. FSAs can also be used by farmers to pay for construction and renovations on their properties.

Participating lenders can guarantee FSA loans up to 95% of the loan’s total value. This arrangement is similar to SBA loans and offers additional benefits to borrowers. FSA loans are available in amounts up to $949,000 with repayment terms that can last as long as 40 year.

Businesses must meet certain requirements to be eligible for guaranteed FSA loans. This includes the requirements of the lender and the FSA. Minimum 3 years farming experience from the previous 10 years. The lender may require you to have a business history, credit score and revenue.

Applying for an FSA loan directly with the FSA is one way to get around some credit score requirements. For more information or to apply for a loan, you can contact your local USDA Service Center.

Term Loans

Term loans can be structured in the same way as traditional business loans. You’ll get a lump sum of capital that you will repay over regular payments. Term loans are short-term and can last for as little as one year, or as long as 25.

Term loans can be used to break down large investments or purchases into smaller payments. A term loan can be used to finance real property, equipment, or pursue growth opportunities. This funding type is also used by many businesses for debt refinance or consolidation.

A strong estimate of the amount of funding that your business will require is the best way to approach a term-loan. This will ensure that your monthly payments are consistent throughout the loan’s term, which makes it easier to plan ahead.

You can apply online for term loans, as well as credit unions and banks. National Business Capital allows you to compare lenders and determine the best terms and rates for your business.

Business Lines of Credit

Revolving credit lines for business are credit lines that you can draw from when capital requirements arise.

They function in a similar way to credit cards but have higher funding limits.

Credit cards for business are known for their flexibility. You can reassess your funds as you pay off your balance. You can use this funding type to pay for all types of business expenses. They can even be used by many firms as an emergency fund to pay for unanticipated expenses.

6 Farm Grants for Women

Farm loans are the best option if you want to start a farm or make significant investments. These loans offer large amounts of funding and the opportunity to reduce significant costs into smaller chunks.

Grants, although smaller than farm loans in terms of size, can still be a valuable financial resource. Here are some top financial resources available to female farmers.

Vermont Farm Women’s Fund

Provides scholarships and grants to women farmers who want to grow their farms and further their education in agriculture.

WAMS

This grant, also known as the Women and Minorities in Science, Technology, Engineering and Mathematics Fields Program, provides up to $300,000 for research to support various agricultural projects.

SARE grants

The program provides up to $250,000 for research projects that advance agricultural practices.

FruitGuys Community Fund

This program offers up to $5,000 to small farmers and non-profits to make them more sustainable.

Young Farmer Grant Program

This program is for young farmers and ranchers who could use an extra financial boost. They have a track record of providing $5,000 to 50 selected farmers and ranchers.

This program offers farmers and ranchers who work with livestock up to $3,000 with the goal of improving animal welfare.

How to Apply For a Farm Loan

A farm loan application is no different than a general loan application. There are some basic steps and processes. You can take a look at the steps and processes to see how it could look.

Step 1 – Understand Your Funding Needs

Calculating how much money you will need to achieve your goals is a good place to begin. To ensure that you get the correct amount when purchasing assets such as land or equipment, you need to calculate the estimated sale price.

Consider making projections for ongoing projects or looking into a business credit line that allows you to be flexible.

Step 2 – Consider the Requirements to Obtain a Farm Loan

The type of lender you work with will have different requirements, such as credit score, revenue, or time in business. While some lenders might have strict requirements regarding credit scores, others may be more flexible.

Additional qualifications are required to be eligible for an FSA loan or SBA loan. First, your business must be located in the U.S. and you must prove that you are able to repay the loan.

Although the requirements for SBA and FSA loans are different, they will generally require you to have good credit.

Step 3 – Decide on the Loan Type

Farm loans come in many forms, as mentioned. You can choose the structure that best suits your business and set a repayment schedule. Talk to your lender if you are unsure about which type of farm loan you should apply for.

Step 4 – Select a Lender

Unless you are looking for an FSA loan through the FSA directly, you will need to work with a commercial lender. This applies to guaranteed FSA loans, SBA loan, and other farm loans. Qualifying lenders include credit unions, banks, and online lenders.

To ensure that you get the best rate, it is a good idea to compare financing rates with at least two lenders. Working with a B2B finance marketplace such as National Business Capital is a great way to do so. You’ll get personalized loan offers within minutes of submitting a single application.

Step 5: Submit Your Application

After you have chosen the lender and gathered all the required documents, you can begin the application. While application processing times may vary, they are often longer for those who work with banks or apply for SBA loans. Consider an online lender if you require quick funding.

Review Loans for Women with National

We recognize that women are an integral part of the agriculture industry and want to help them. National assists businesses in every stage of their funding search. Our experts can help you find the best farm loan to meet your needs and grow your company.

Find out more about National’s funding solutions here span styling=”font-weight 400 ;”>.