In the farm and agriculture business, it’s not always smooth sailing. You might find yourself running into tough times where you’re running low on money, and you’re in need of some financial help; here’s where getting an agricultural loan comes in handy.
However, before applying for an agriculture loan, you must know everything there is about what you should expect, the eligibility criteria, and the advantages and disadvantages of agriculture loans and types of mortgage loans. Luckily for you, that’s exactly what I’ll be covering in this article, so keep on reading.
What Are Agriculture Loans?
Agriculture loans are any kind of money you borrow from corporations, banks, or federal finance providers like the Regional Investment Corporation (RIC).
That money is usually used to enhance your farm business. You can use it to buy equipment, secure yourself from droughts, recover from droughts, repay debts, or anything alike.
Usually, farmers or farm owners apply for agriculture loans to enhance the condition of the farms, equipment, or livestock that can later be used commercially to make profits.
Types of Agriculture Loans
Throughout the section, I will walk you through the different kinds of agriculture loans or a bicycle loan that you can apply for, so you can pick whichever kind best fits what you’re looking for.
Farm Investment Loan
Farm investment loans are usually used to enhance farm conditions in terms of livestock, land, or equipment in order to increase the farm’s productivity.
You can apply for a farm investment last minute loan with bad credit for drought-related investments like recovering from drought or preparing for an upcoming one. However, keep in mind that farm investment loans can’t be used to pay for non-farm related expenses.
Farm investment loans are the most extensive kind of agriculture loans because they cover many areas, and they’re suitable for most people, so keep that in mind if you don’t know where to start.
You can get up to $2 million with an interest rate of 1.77%, and you can apply anytime and without having to pay an application fee if you’re applying for the RIC loans.
The second kind of laser loan is the Starter loan. Loans for dental work areperfect for those who are just starting their arm and seeking to cover expenses of land, infrastructure, or anything else used to start a farm business.
You can even use it to invest in new infrastructure or pieces of equipment to cover the operating expenses of the farm itself.
However, you can’t use the money to pay for personal assets or for any non-farm related expenses. The RIC can lend you up to $2 million with a 1.77% interest rate.
As for drought loans, this is the kind of loan you would get to pay for operating expenses after you’ve been affected by a drought. Also, you can get this loan to prepare for an upcoming drought.
For this loan, in particular, you need to provide a drought management plan if you’re applying for the RIC loan with which you can get up to $2 million with an interest rate of 1.77% and no application fees whatsoever.
Business Drought Loan
If you’re a small business owner who was affected by drought, you can apply for these kinds of bad credit jet ski loans as it is targeted at smaller businesses, in particular. Also, you can apply for this loan if you’re supplying goods or services to farm businesses.
To classify your business as “small,” you must have less than 20 employees, and your goods or services must be related directly to the farm businesses’ primary production.
You can use the money from this loan to pay salaries and rent, pay debts to your suppliers, or keep up with the operating expenses of your business.
Much like the other kind of camper trailer loan interest rates, you can’t use the money to pay for your personal assets.
However, for this loan, you can get up to $500,000 only with the same interest rate of 1.77% when applying with the RIC.
Agriculture Loans Eligibility Criteria
Before applying for agricultural loans, you must be aware that it’s not that easy as it may seem. Banks and corporations have some requirements and eligibility criteria that you must meet for your loan application to be accepted.
First of all, you must be an Australian citizen with an Australian business number (ABN) for most cases. Most –if not all– corporations will require the financial history of your business, your cash flow budget, and some basic documents like the identity of your business.
For the RIC, for example, you must contribute more than 75% of your labour to the farm business and earn 50% of your income from the firm business. Also, you must prove that your business is in need of jewelry short term loan and that you have the capacity to pay the aussie boat loans later on by verifying that you’re financially reliable in the long term.
Lastly, keep in mind that those requirements are bound to change depending on the kind of loan you’re applying for and each corporations’ criteria for handing out loans in the first place.
Why Get an Agriculture Loan?
Farm loans can be pretty beneficial for any farm owner struggling to keep up with the farm’s operating expenses. You can use student laptop loans money to keep your livestock alive and healthy, upgrade your equipment, or anything that might enhance the production of your farm.
Agriculture Loans Interest Rates
The most crucial disadvantage of getting any lifestyle property purchasing loan is the interest rate you will have to pay later on. For example, RIC’s 1.77% might not seem that high, but it actually is if you’re getting a large loan, so keep that in mind before getting one.
Also, most banks and corporations’ interest rate is around the same percentage as RIC, but try looking for the lowest rate possible depending on the kind of loan you need.
How to Apply for a Loan for Agriculture
Depending on the corporation you decide to go for, you will most likely find an application form online that you can fill with the required information in order to get your loan.
Additionally, you will find the requirements of each bank or corporation online. So, make sure you get all the required documents ready beforehand, especially if you’re applying in-person, to save yourself the time and effort of having to redo the whole process all over again.
You might find that some corporations ask for an application fee. You might also find some applications that only open for a certain amount of time and not indefinitely, so try not to miss the deadline if there is one.
Lastly, make sure you read the terms and conditions multiple times and run them by a lawyer if possible to make sure you fully understand the contract you’re getting yourself into.
I hope that this article has covered everything you were looking for and has put you on the right path to getting your agriculture loan application accepted.
Don’t settle for the first contract you see; check with multiple banks and corporations to ensure you’re getting the best deal that fits your farm business. Also, try to opt for the lowest interest rate possible to save yourself some money in the future.