Farm loans help farmers buy, operate, and expand a farm. Farm loans can provide liquid cash at the startup phase as well as help established farms with a cash crunch during a seasonal challenge. Equipment, crop, and livestock financing as well as credit lines are common ways a farm loan can take form.
Farm loans vary depending on the size of your farm, your financial history, your collateral, and whether you qualify for a federal Farm Service Agency (FSA) loan program or a farm program designed by a commercial lender. According to the FSA, farm ownership and operating loans in 2019 were the third-highest in agency history, topping over $5.7 billion.
Even if you have less-than-perfect credit, limited experience, or less down payment money than you wish you had, you’re bound to find a lender in this list that can work with you. We researched 15 farm lenders before we chose the seven best farm loans. Read on to see which ones meet your needs.
Best Farm Loans of 2021
- Best Overall: Farm Credit Mid-America
- Best for Incremental Purchasing: AgAmerica Lending
- Best for Good Credit: American Farm Mortgage & Financial Services
- Best for Fair Credit: Camino Financial
- Best for Low Down Payment: Farm Credit Services of America
- Best for Ease of Qualifications: AdvancePoint Capital
- Best for Starting a Farm: Farm Plus Financial
Best Overall: Farm Credit Mid-America
With Farm Credit Mid-America, farmers can purchase farmland, construct or repair buildings and other fixtures, and finance equipment through the very favorable Guaranteed Farm Loan Program, making it our best overall lender for farm loans.
Up to 40-year repayment terms
Loan conversion programs for better rates and terms
Loan limits up to $1,776,000
Complementary programs to help farmers’ changing needs
To qualify, you must show that you are backed by an FSA Guarantee
Everything is agreed between FSA and the lender
Only lends in Indiana, Ohio, Kentucky, and Tennessee
Farm Credit Mid-America can fund any stage of a farming business. It’s the best overall farm loan lender not only because it’s an approved FSA guaranteed lender, but also because of its breadth of services and additional features, like equipment financing, cash management, crop insurance, and food and fiber debt syndications.
Closing costs, including title and appraisal, accompany a very low 5% down payment minimum at the beginning of the loan. Interest rates range from 1.25% to 2.5%.
In addition to real estate loans, they also offer crop insurance, investments, equipment leasing, and specialized financing for beef, dairy, poultry, swine, and timber farmers.
The FSA’s loan programs can take up to 60 days for approval and closing, regardless of which lender manages the process. Farm Credit Mid-America’s other programs, however, can fund in less than a month. For the FSA Guaranteed Loan Program, Farm Credit Mid-America will look at your entire financial picture to evaluate your application.
As part of the Farm Credit System, this lender has been a financial services cooperative since 1908. As a cooperative, it is owned by its customer stockholders who purchase voting stock. In the Spring of 2020, its Patronage program returned $186.6 million to its eligible customers. Customer reviews appreciate these annual distributions and reinforce consumer loyalty.
Best for Incremental Purchasing: AgAmerica Lending
As our best for incremental purchases, AgAmerica Lending’s 10-Year Line of Credit (LOC) is the easiest program to use for farmers who want to apply just once, but enjoy the benefits of a revolving line of credit to use as they need for a full 10-year period.
Option to convert to a term loan
Use funds for any business purpose
No mandatory annual renewal paperwork
No mandatory pay-downs
You must own or plan to buy at least 25 acres to qualify for their loans
No weekend hours to talk to a representative
Minimum credit score of 680 required
We chose AgAmerica Lending’s 10-Year LOC as the best for incremental purchasing because it was designed to save farmers from annual paperwork. That simplicity makes it the smartest financial choice for a farmer who needs funds to expand but only wants to carry debt for what she actually spends.
The closing costs for their LOC are lower than obtaining a term loan to buy real estate. Expect just 3% of the loan size. During the LOC’s life, you’ll never have a prepayment penalty, and you can choose between making interest-only payments or 25-year amortizations to pay down principal.
You also have the option to convert your LOC to a term loan. AgAmerica has agricultural land loans, short-term bridge loans, and rural infrastructure loans for things like solar and wind farms. You’ll need a credit score of at least 680 to work with them.
They offer operational loans tailored to 15 different agricultural commodity farms, like cattle, row crops, and dairy, just to name a few.
AgAmerica Lending has an impressive collection of testimonials from their clients. Their nationwide land and commodity expertise coupled with hands-on customer service has won them many loyal customers who appreciate their stress-free loan process. Most loans close in under 45 days.
AgAmerica is based in Lakeland, Florida, and Boise, Idaho, and was founded in 2010. They underwrite and service loans from $100,000 to $100 million and are on track to become the nation’s premier land lender.
Best for Good Credit: American Farm Mortgage & Financial Services
American Farm Mortgage & Financial Services offers competitive rates, quick decision express loans, and FSA low down payment loans for borrowers with credit scores in the mid 600s to low 700s, earning our nod for best farm lender for borrowers with good credit.
Competitive loan options
Multiple repayment periods
Loan-to-value ratio of up to 95% with the FSA program
Must operate the business for at least three of the past 10 years to qualify
The first mortgage loan term fixes the rate for the first 15 years of a 30-year term
No commodity specialty loan products
With a suite of competitive loan programs available to beginning and experienced farmers with credit scores in the mid 600s and low 700s, American Farm Mortgage & Financial Services wins our top vote for borrowers with good credit.
They have loan terms up to 30 years along with competitive interest rates and flexible payment structures. Loan closing costs can include an FSA guarantee fee of 1.5% of the guaranteed portion of the loan. Other closing costs would be in the $3,000 to $5,000 range. The down payment would range from 5% if you qualify for an FSA program, up to 30% for their non-FSA agricultural real estate loans.
Other things that make this lender attractive are its real estate secured revolving line of credit program and its AgXpress loan with a one-day decision turnaround time and a max loan size of up to $1.5 million if you have a credit score of at least 720.
American Farm Mortgage & Financial Services is a subsidiary of Legence Bank, a financial institution founded in 1906. They have a customer-focused work practice intended to help business owners, which is why they founded American Farm Mortgage & Financial Services, an agricultural farm real estate lender on a mission to help farmers found and grow their business.
Best for Fair Credit: Camino Financial
Camino Financial has a small business loan for farmers that can fund within two days and serves borrowers with credit scores above 550, making it our best lender for borrowers with fair credit.
Accepts credit scores as low as 550
Receive funds as soon as two days
Committed to assisting minority small business owners
Loan sizes range from $10,000 to $400,000
You must be in business for at least nine months to qualify
Need to generate at least $30,000 annually to qualify
Rates and fees are high
Camino Financial’s small business loan for farmers earns our top recommendation for fair credit borrowers because they accept scores as low as 550 and fund as quickly as two days.
As expected, rates and fees are a bit higher for lower credit scores. You can expect annual interest rates to start at 12%, with origination fees of 5% to 7% of the total loan amount. This is a short-term loan, so your payback term will be between two and five years, with no prepayment penalty. Camino lends throughout the U.S. except in New Jersey, Hawaii, and Puerto Rico.
You must own at least 50% of the farm. After you make nine on-time payments, you can qualify for a loan with a lower APR and a longer payback term.
In 2020, they started offering SBA Paycheck Protection Program funds, Economic Injury Disaster Loans, and other COVID-19 relief loans. The company’s specialty is its small business loan program for fair credit borrowers, with a special emphasis on assisting minority business owners.
Their customer satisfaction reviews on Google, Facebook, and Trustpilot all average 4.7 stars out of 5.
With an online application, you’ll receive a pre-approval decision in 24 hours. From there, your loan specialist will tell you what documents you need for final approval. They fund your business bank account in two to 10 days, making Camino Financial one of the fastest farm lenders.
Camino Financial was founded in 2014 by two Harvard-educated brothers from the Los Angeles area. Their mother owned 30 Mexican restaurants but lost her business when they were 12 years old. They founded Camino Financial to offer the support that banks had denied their mother when she needed it most.
Best for Low Down Payment: Farm Credit Services of America
Our best low down payment lender, Farm Credit Services of America, can act as the commercial lender partner for the low fee, low rate, low down payment loans offered by the FSA, and further stands out with its down payment financing for contract facilities.
Can be used for virtually anything having to do with farm operations
General and Specialized loans
Breeding livestock loans
Contract finishing loans
Must be 35 years old or less to qualify for the low down payment terms
Must have less than 10 years of primary operation management
Projected annual gross farm income must be less than $250,000
Lends in Iowa, Nebraska, South Dakota, and Wyoming only
Farm Credit Services of America goes the extra step by helping you finance your down payment, making them our best low down payment farm lender.
To qualify for a 5% down payment loan, you need to pursue one of the USDA FSA loan programs. Farm Credit Services of America can help you finance even your down payment money, which is usually something lenders won’t do.
Naturally, with just a 5% down payment, the borrower’s upfront costs become much lower. All that will remain will be the appraisal, title, and other document fees for the loan to close. During the loan, the annual percentage rates are dictated by the USDA and are in the 2.0% to 2.5% range.
Funds from Farm Credit Services of America can be used for cash liquidity during startup operations, restoring liquidity for farms facing operational challenges, and the purchase and breeding of livestock.
The company has loans and leases, rural home loans, insurance, and specialized financing for large-scale food companies. Credit scores and financial history matter, but they are considered with your whole financial picture.
The company’s portfolio is sound thanks to how they’ve spread their exposure across several agribusiness capital niches, such as swine, renewable fuels, grain, and forest products, to name a few. This diversity across commodities has allowed them to build their capital commitments up to $16.9 billion in 2019. They have grown every year since 2011.
Best for Ease of Qualifications: AdvancePoint Capital
AdvancePoint Capital’s short-term loans for agricultural and farm businesses can save the day when you can’t qualify for other loan options, making it our best for ease of qualification.
Funds available as soon as one day
Poor credit is OK
18-month repayment term
Higher rates and fees than traditional loans
Loan amounts cap at $500,000
When you can’t qualify anywhere else, AdvancePoint Capital, the lender with the easiest qualification criteria, can probably get you over the goal line, edging out the competition in this category. Their short-term business loans can work with applicants who have low credit and other financial challenges.
Short-term loans are given for a period of 18 months or less. Users that need short-term financing can reach out to AdvancePoint Capital and get it for a monthly factor rate ranging from 1.09% to 1.35%, and pay up to 3% in origination fees. The typical term is less than 12 months and funds within 24 hours.
Founded in 2013, AdvancePoint Capital is based in New Jersey but offers loans for small businesses, including farms, nationwide. Known as America’s small business funding marketplace, they offer loans from $10,000 to $500,000 to help owners improve their financial situation and grow their business.
As a company with high ratings, AdvancePoint Capital is a reliable loan platform that matches users with business loans, lines of credit, invoice factoring, equipment leasing, and business cash advances.
Best for Starting a Farm: Farm Plus Financial
Farms require money and expertise to be successful, and our top choice for starting a farm, Farm Plus Financial, offers both.
Loans range from $400,000 to $25 million
Doesn’t require an excellent credit score
High customer satisfaction ratings
No collateral boundaries nationwide
Borrower must have sufficient income to service all debts
Borrowers have to provide at least 30% down payment
Doesn’t lend in North Dakota
680 credit score minimum
Farm Plus Financial provides its clients with a team experienced in agriculture, running a farm, and lending, so they are a perfect choice for guiding someone through the beginning stages of funding your new farm wisely. With loan sizes in the $400,000 to $25 million range, that expertise becomes even more critical with large sums of money during the startup phase, making them our best lender for people who want to start a farm. If you’re starting your farm part-time, Farm Plus Financial can help you there as well with their Part-time Farmer Loans.
Most loan options require a 30% down payment, and budget at least $20,000 for closing expenses if your loan amount is in the $500,000 range.
Farm Plus Financial specializes in loan types with variable and fixed-rate options, long-term and short-term loans, part-time farmer loans, and lines of credit. Most of their loan products come with conversion and split options, which give the borrower the ability to convert to a loan that better fits their needs as they change over time. Customer ratings are exceptional, with Trustpilot scores averaging 4.7 out of 5 stars.
With a minimum 680 credit score, customers can get pre-qualified online quickly nationwide except in North Dakota. They close some loans within a few weeks to a month and post a list of the typical documents needed.
Founded in 2007 in Lone Tree, Colorado, Farm Plus Financial has developed a league of satisfied customers for their agriculture, farm, ranch, and vineyard and winery loans. In addition to Trustpilot, Farm Plus Financial has earned 4.9 stars out of 5 at USA Loans Reviews.
You’ll find the best rates and terms with FSA-backed loans. The commercial lenders we’ve reviewed can partner with the FSA to implement these federal programs. If you don’t qualify for an FSA program, the lenders we’ve chosen all have other loan products that may help.
While the FSA guaranteed loans have down payments as low as 5%, commercial lenders typically want to see a 30% down payment. There are good options for borrowers with damaged credit, as well as for farmers who need funds within a week.
Farm Credit Mid-America earned our top spot as best overall because it has access to low-cost FSA programs and a suite of complementary loans for operations, equipment financing, lines of credit, specialized commodity loans, and crop insurance.
|Best Farm Loans|
|Lender||Why We Picked It||Where They Lend|
|Farm Credit Mid-America||Best Overall||Indiana, Ohio, Kentucky, and Tennessee|
|AgAmerica Lending||Best for Incremental Purchasing||Nationwide|
|American Farm Mortgage & Financial Services||Best for Good Credit||Nationwide|
|Camino Financial||Best for Fair Credit||Nationwide except in New Jersey, Hawaii, and Puerto Rico|
|Farm Credit Services of America||Best for Low Down Payment||Iowa, Nebraska, South Dakota, Wyoming|
|AdvancePoint Capital||Best for Ease of Qualifications||Nationwide|
|Farm Plus Financial||Best for Starting a Farm||Nationwide except North Dakota|
What Is a Farm Loan?
Farm loans will help you purchase, operate, and expand a farm. They come in the form of real estate loans, operating loans for cash liquidity, lines of credit for incremental purchases, and equipment financing.
An operating loan may help finance operating costs, cash liquidity and management, repairs, new livestock, feed, seed, and equipment like tractors, greenhouses, and irrigation systems. Both government and commercial loan programs finance for all of these scenarios.
What Kind of Financing Is Available for Farms?
Government-backed loans from the USDA’s FSA provide funds for farm startup or acquisition, operations, and expansion with the lowest available down payment requirements and interest rates. Payback terms can range from 10 to 40 years depending on what the financing is for, and down payments can be as low as 5%. Fixed-rate loans range from 2.0% to 2.5%.
Commercial financing picks up where the FSA leaves off, providing additional programs with various lending limits, and usually shorter payback terms, higher rates, and higher down payment requirements. They offer fixed and variable rate financing for short and long term loans, as well as credit lines, equipment loans and leases, and rural home loans.
How Do USDA Farm Loans Work?
The USDA provides a very competitive direct farm ownership loan where the FSA funds the farmer with no lending intermediary in the middle. There are also guaranteed farm loans where the FSA contributes up to 50% and a commercial lender or cooperative finances the rest, combined with a 5% down payment provided by the borrower. In 2019, direct farm ownership loan obligations reached their highest level ever at $1.47 billion. The FSA sets aside large sums every year to allocate to beginning farmers to help younger generations get into farming.
How Can I Qualify for a Farm Credit?
To qualify for a farm credit, find a lender that finances in your state and see if you meet their credit score criteria. Some lenders require a credit score of 680 while others specialize in helping borrowers with much lower credit scores. Many loans will be collateralized by real estate, so there are many more farm loan options for you once you have an established farm. New farmers can qualify through loan programs designed to help them with less collateral and lower down payments, but typically require you to be under age 35.
How We Chose the Best Farm Loans
After reviewing 15 lenders we found a strong seven that can help you either in specific circumstances or as a full-service financial offering for decades of farming growth. We summarized the perks and imperfections of each lender and program, laid out the costs you can expect for each loan, and explored the extra services the lender provides to supplement your experience with them.
We valued companies with demonstrated experience, high customer satisfaction ratings, and wherever possible, a nationwide offering. Companies with an efficient online application process earned points with us too. Funding speed also matters, but lenders who offered the highly beneficial FSA programs made it to our top rankings because the USDA largely controls the processing speed for those programs. They are often worth their wait.