Best Agriculture Business Loans for 2022

There are many things to take into consideration when financing your Agricultural business. From overseeing working capital requirements to the agriculture business in general - having different farming loans on hand can be a lifeline.

Written by Brian Huber, updated on 11/11/2021
Financially Reviewed by
 Gordon ScottCMT on 6.1.2021

At A Glance — Various financial institutions provide agriculture business loans to get you started or help you keep up your momentum. Yet, how do you know which lender offers the top rates and terms, and which details you should take into consideration when choosing the right loan type? You don’t want to lock in any deals or sign any contracts before finding a loan that suits your farming needs. Read on to see our experts' agricultural business loan recommendations and more.

A Quick Overview of the Best Agriculture Business Loans

In the table below we compare the top types of agriculture business loans and provide you with recommended lenders for each loan type:

Financing Need

Best Loan Type

Loan Features 

Recommended Lender

Land and equipment acquisition

Agriculture loan

  • Amount: Up to $5 mil
  • Term: 6 months to 10 years
  • Interest: Estimated around 7%
  • Time to get the loan: 24 hours to 4 weeks



Equipment loans

  • Amount: up to 100% value of equipment
  • Term: 2 to 5 years
  • Interest: Between 7% and 25%
  • Time to get the loan: Up to 48 hours


Maintenance and repairs

Business line of credit

  • Amount: Up to $500,000
  • Term: Up to 18 months
  • Interest: Between 7% and 25%
  • Time to get the loan: Up to 24 hours


Agricultural grants

SBA loan

  • Amount: Up to $5 mil
  • Term: Up to 25 years
  • Interest: From 6% and up
  • Time to get the loan: Up to 2 weeks


Agriculture Business Loans Explained

We’ve explained, in summary, the best loan types for starting an agriculture business above, now we will take a deeper look into each loan type.

1. Fundera - Best for Land and Equipment acquisition

Agricultural loans include land acquisition, orchard development, storage and packing facilities, real estate improvement, and so much more. These loans also make provisions for an operating budget to get you through the first few years. 

This industry-specific loan is beneficial because you can choose the terms and type of loan you want based on your needs. For instance, the options include short, medium, and long-term, while you can also opt for operating and real estate fundings if that’s all you need. It’s extremely versatile for anyone either setting up a new agriculture business or expanding an existing one.

While Fundera specializes in startup loans, it also covers several aspects of agriculture business loans. You can incorporate credit cards for continuous funds when needed and invoice factoring to cater to your administration requirements.

2. SmartBiz - Best for Equipment Loans

If you would like to obtain funds primarily for vehicles and tools, you may want to take a detailed look at equipment financing. Purchasing tools and vehicles require a significant capital outlay. Furthermore, the lender may require a down payment before you acquire any loan. This doesn’t only apply to movable assets, such as tractors and mowers, but also to fixed assets like silos and barns.

Aside from real estate, vehicles and equipment will form the bulk of your initial capital layout. You won’t be able to work your crops without equipment. An equipment loan can set you on the path toward starting your agriculture business with the right tools. It can also provide you with finances if you need to replace parts in the first year or so.

SmartBiz is known for financing construction loans, which include setup costs for equipment and machinery. You can use its online platform to determine your business’s best loan options, by assessing various terms and amounts. It also has long-term periods, letting you plan for the next few years.

3. BlueVine - Best for Business Line of Credit

The above loans are excellent for starting your agriculture company, but what happens if your planning goes wrong, and there’s suddenly a mechanical failure that you can’t afford to repair? A business line of credit is a mix between a loan and a credit card, providing you with funds. What’s great is that you’ll only pay interest on the amount of money that you use. Once you make a payment on the credit, the money becomes available again.

Also known as revolving credit, these loan types are ideal for helping you with emergencies, such as burst irrigation pipes or broken fences. If you suddenly need to procure additional tools or resources in adverse conditions, you can draw from your line of credit and repay it at your convenience. 

BlueVine has an exceptional line of credit for up to $250,000 with a low-interest rate of 4.8%. Since they understand the need for urgency, you won’t wait long until the approved funds are in your account. You can also apply for a loan through an online platform. 

4. LendingClub - Best for SBA Loans

The government has unique agriculture grants for farmers to help them start their businesses. Known as Small Business Administration loans, these loan providers can pay up to 85% of the financing to cover your initial costs. However, assets can be sold if you fail to make a turnover, and you need to have been in business for a few years to qualify. 

This may be viewed as a grant rather than a startup loan. Since the government only guarantees a percentage, you may need to find financing for the remainder of the money you require. This loan type helps new agricultural businesses who are struggling to get funds through other means.

LendingClub specializes in agricultural loans but also offers SBA funding. It works as a community, functioning on peer-to-peer support and finding the best financing options available. It has a fast quote system to help you get established quickly.

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What is an Agriculture Business Loan?

Loans for agricultural businesses provide funds for equipment, land acquisition, and working capital. Financing is available from traditional lenders and government agencies. Typical agricultural business operations include farmers, ranchers, dairy operators, and orchard owners.

Financing sources for agricultural businesses generally require a proven track record of income as well as sound collateral and good credit. Government programs provide agricultural business loans either directly from the federal agency or by guaranteeing a loan from a traditional lender.

How Much Does it Cost to Open an Agriculture Business?

The size of agriculture business loans you will need to apply for will vary depending on the plans you have for your farm. Are you aiming to start small with a wheat farm, or are you seeking to add livestock? What size land do you need, and how many workers do you plan on employing?

The crop types you wish to work with will also affect what equipment and vehicles you’ll need. Harvesters have different headers and storage units for various crops. There are so many variables, it’s challenging to determine what it costs to open an agriculture business.

However, we can provide two examples to give you a rough idea of what some agricultural businesses require. Of course, you can start smaller, but your profits will be smaller, and it’ll take you longer to evolve your business. Please note that these are just estimates and general examples.

$5,500,000: Grain farm with corn and beans, delivering around $75,000 income per year:

  • 500 acres of land @ $7,500 per acre: $3.75 mil
  • Combine with headers and platform and tractor for plowing: $400k
  • Other equipment, such as planters, drills, cultivator, etc: $450k
  • Storage for 75,000 bushels: $300k
  • Planting, fertilizing, and spraying of crops: $350k

$4,440,000: Wheat farm, delivering around $75,000 income per year:

  • 3,000 acres of non-irrigated land at approx. $2,400 per acre: $3 mil
  • Tractors, grain trucks, and equipment: $1 mil
  • Wheat planting and spraying: $200k
  • Storage buildings: $200k
  • Operating and living budget for nine months: $40k

Recommended Reading: Best Self Storage Business Loans for 2022

How to Choose the Best Agriculture Business Loans

Don’t just sign a contract with the first agriculture business loans you find. We recommend you consider a few factors before you commit to one loan:

  • Perform research on your requirements: Don’t assume you’ll need the same equipment and land as your competitor or allies. Do diligent research on what you’ll need to fulfill your goals and what you can live without.
  • Check for procurement clauses: Some lenders only provide financing if you buy from select vendors. Empower yourself and don’t lock yourself into these agreements.
  • Tax benefits: Agriculture business loans give you access to two tax benefits. One connects to asset depreciation and the other to loan repayments. However, it doesn’t apply to leasing equipment. Ensure the loan you choose provides you with these benefits.
  • Affordable repayment terms: While long loan terms are appealing, you’ll repay a massive amount that may not be sustainable. Look for a short duration with a repayment amount you can afford based on the potential return on investment.
  • Augment a loan with a business line of credit: You don’t need to choose one massive loan to cover all your expenses. You can start by selecting a smaller loan and then cater to other financial requirements as and when they arise.
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Can You Get an Agricultural Loan With Bad Credit?

Below average credit scores commonly preclude agricultural businesses from traditional borrowing. However, borrowers with lower credit scores can receive assistance from the Farm Service Agency, which provides loan guarantees to traditional lenders. A lender will still examine certain borrowing qualifications. 

The FSA also grants direct loans, which have slightly more strict requirements than guaranteed loans. Also available to agricultural businesses are alternative lenders, who rely mostly on profitability and length of time in business, considering collateral of lesser importance. 

What Interest Rates Can You Expect on an Agriculture Loan?

Interest rates for agricultural loans vary depending on repayment terms and borrowing purposes. Traditional lenders have lower rates than alternative lenders but require a more down payment. The lowest rates are Farm Service Agency direct loans.

Agricultural land loans from traditional lenders charge about 3% for 30 years, but FSA direct loans are lower for 20-years and 40-years. Loans for agricultural equipment or working capital range from 2% to 20%. For a 5-year equipment loan, expect at least 6% interest from a traditional lender and 9% from an alternative lender. FSA working capital loans are as low as 1.375%.

See Our Additional Guides on Industry-Specific Loans

Bottom Line

Farming can be challenging, and competition from around the globe means that you must put in maximum effort just to keep up. As this guide has shown, there are a variety of farm finance and agricultural loans that will help you realize your agricultural business plans. Now that you have read our guide and seen the top agricultural loan types available we hope you have the confidence you need to choose the right loan for your business needs.