How to Get a Loan for Farm Equipment
Farm loans work in relatively the same way as any other loan processes. Here, one needs to own a farm before looking at possibilities to acquire farm equipments. The amount of money you can get will depend on the growth of your business, where the lender will need some guarantees.
Instructions
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Begin the process by listing your needs. What type of equipment you require and the relevant quantity. Search the market for potential manufacturers, and get quotations. That will help you assess the market price and will put you in a better position in terms of your finances. If you think the price is low, then try buying in bulk by obtaining a larger amount in loan now, rather than applying again the next term. Consider the larger picture rather than short term gains.
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As with any loan dealing, the next task is to sort out your own financial figures and information. The lender will want to have a clear understanding of your business, and whether his money is in safe hands. Gather all the information, which will include cash-flow stream, your tax payment history and other relevant details before handing out your request to buy new farm equipment.
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While considering your personal banker or financial institution is always recommended, in farm loan cases, there are many government schemes which are based specifically to aid farmers.
The Farm Service agency, which is a part of the US Department of Agriculture, hand out loans worth up to $300,000 and are specifically there to allocate certain proportion to farmers. The funds for farmers are not only allocated for buying equipments, but further aid them in expanding their business, and meeting their expenses. Search thoroughly before relying on your personal lender. Fill out the application form offered by the FSA and see if you meet the criteria. The agency further offers loan in cases of natural disaster and help you determine if there are any grants available.
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Get in touch with other farmers, who have gone through such situations. There are specific farm lenders who may be able to help you in terms of getting lower-interest rate on your loan. However, that will depend on your credit rating and previous loan history.
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Also take into consideration the idea of leasing your equipment. Rather than asking the lender to buy everything up front, leasing can help in some cases. Here, you need to give some amount as down payment before paying periodically. Take that route only if you think the agriculture business will grow and you will have enough money to pay out your lease.
