From unpredictable weather to uncertainty in global markets to bird flu, farm and ranch operations in Minnesota face many uncertainties. An ag loan helps you manage these everchanging variables so you can sustain and grow your operation.

The Lake Region Bank commercial lending team can be your calm in the storm and help you find the right lending product for your needs, whether you’re expanding your operation, investing in new equipment, or supporting your daily operational needs. Let’s take a closer look at the different types of ag loans, who writes them, and how to prepare a strong ag loan application.

Types of Ag Loans

There are several ag loan products you can use to fund your ag operation, whether you’re growing commodity crops, specialty crops, or livestock or running a dairy.

Farm Ownership Loans

A farm ownership loan helps farmers and ranchers purchase land, expand their operations, or make long-term improvements to their properties. You can use a farm ownership loan to buy farmland or ranch property, construct or renovate barns and other structures, and implement conservation practices to improve the quality of your soil and water.

Lake Region Bank and other traditional banks and credit unions can write farm ownership loans. You may also qualify for a USDA-backed Farm Service Agency farm ownership loan. Farm ownership loans are also available through the Farm Credit System.

Operating Loans

Operating loans provide short-term capital to cover day-to-day expenses so you can run your operation smoothly through the growing season. Use an operating loan to purchase seed, fertilizers, and pesticides. Or, use it to cover labor costs and wages for your workers. An operating loan can also be used to pay for irrigation, utilities, and other operational expenses.

Lake Region Bank can help you understand if an operating loan is the right choice for your needs. These loans are also available through the USDA. Some ag coops may have operating loan financing programs, too.

Equipment Loans

New ag equipment is specialized, cutting-edge, and expensive. If you need to invest in additional equipment for your operation, an equipment loan may be the right choice for you. Equipment loans can be used to purchase your next tractor, combine, or plow, install new irrigation or grain storage facilities, or invest in new milking machines or other livestock equipment.

Lake Region Bank can write equipment loans for qualified ag operations. They are also available through the Farm Credit System and USDA.

USDA and Other Government-Backed Ag Loans

Let’s take a closer look at USDA and other government-backed ag loans. These loan options are available to farmers who may not qualify for traditional loans due to credit history or limited collateral. Government-backed loans offer competitive interest rates and flexible repayment terms for those who qualify.

USDA FSA Loans

The USDA’s Farm Service Agency (FSA) provides several different types of ag loans. Some of the most popular programs include its direct farm ownership loan that helps farmers purchase land and buildings and microloans for small and beginning farmers with lower borrowing needs. The FSA also provides emergency loans for farms affected by natural disasters, such as drought and flooding.

USDA FSA Guaranteed Loans

Many FSA loans are available as guaranteed loans through Lake Region Bank or other local lenders. Lake Region Bank is a USDA-approved lender, and several of our ag loan products are backed by the FSA. Get in touch with our friendly, local commercial lending team today to learn more about your options.

SBA Loans for Agribusinesses

The Small Business Association (SBA) also offers loans to agribusiness owners through its 7(a) and 504 loan programs. Lake Region Bank can help you understand if an SBA loan is right for your expansion, equipment purchasing, or working capital needs.

State and Local Ag Loans

Finally, you may find state or local ag loan options. The Minnesota Rural Finance Authority writes low-interest loans for beginning farmers, ag improvements, livestock expansions, and livestock equipment, among other needs. Your local coop may also offer financing options.

How to Secure an Ag Loan for Your Operation

Applying for any ag loan requires preparation and a solid financial plan. The Lake Region Bank lending team is here to help you find the right loan option for your needs. Here are some general tips on how you can secure your next ag loan.

• Build a strong business plan that outlines your farm’s goals, expected income, and expenses.
• Improve your credit score to secure better loan terms.
• Gather the documents you’ll need to apply for the loan, including tax returns, financial statements, and land appraisals.
• Compare your loan options with a Lake Region Bank lender.
• Look into FSA or SBA loans if traditional options aren’t a good fit.

Ag Loans with Lake Region Bank

Ag loans are crucial tools for sustaining and growing your operation. Whether you require funding for land acquisition, daily expenses, or equipment purchases, it’s important that you understand the different loan options available so you can make an informed financial decision. Need help finding the best ag loan for your farm or ranch? Get in touch with our local, expert, and friendly commercial lenders today.