What Are Some Sources for Financing a Business in Agriculture?


Quick Answer

Financing sources for businesses in agriculture include the Beginning Farmers and Ranchers Loan, the Direct Farm Loan Program and the Rural Energy for America Loan Program offered by the U.S. Department of Agriculture's Farm Service Agency, according to the Beginning Farmer Resource Network of Maine. The Farm Credit Service also offers business education reimbursements, real estate and operating loans and insurance for young and beginning farmers, states the Center for Rural Affairs.

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What Are Some Sources for Financing a Business in Agriculture?
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Full Answer

Local banks are a common source of financing for a business in agriculture, states the Center for Rural Affairs. Though rare, some local banks offer financing initiatives for local farmers. Private contracts, such as property owners contracting land, machinery and livestock to beginning farmers, are another source of financing.

Some states offer tax-free bond programs, which provide financial assistance to beginning farmers to purchase land and equipment, reports the Center for Rural Affairs. One example is the Nebraska Investment Finance Authority Governor's Ag Excellence Program. A list of states with such programs is posted on the National Council of State Agricultural Finance Programs website.

Though limited in opportunity, a state or local grant is another source of financing for agricultural businesses, states the Center for Rural Affairs. Examples of grant funding include the Frontera Farmer Foundation, which is available in the Chicago area, New York's New Farmers Grant Fund, Kentucky Small Scale Farm Grant, Beekman Mortgage Lifter Small Farm grants and the Lakewinds Organic Field Fund.

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