What is the best place to go to to find out about Ag loans?

Discussion in 'Homesteading Questions' started by bergere, Mar 9, 2004.

  1. bergere

    bergere Just living Life

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    Hello Folks..

    OK,, one of our options is to, find out who to talk about the requirements for a Ag loan to start a business?
    Any ideas or thoughts? Web page or address contacts?
    (Please, I do not want to hear it is too hard, everything worth while is a challange.)

    Have raised sheep for many years and did very well. I came from a family that raise sheep and cattle. This part of this state is not a good place to start a Farm, so will be looking at other places.
    We want to go Certified Organic,,,,,Have the information packet that I have had for a number of years, and already run this Farm by the Oregon Tilth.

    Plan to diversify, into small Heritage Cattle, Hair sheep (As much as I love wool sheep, is to labor intensive), Chickens-eggs and meat, Fruit and berrys. My husband and son would be doing the large majority of Farm work, I will have to stay with just the paperwork for the most part. We would start small and very slowly work up from there.

    It is something we both love to do,, and the commute would be from the house to a barn or field. Much better than being in Traffic for 2 hours each way.

    Just trying to keep our options open, if DH can't find a EMC Tech job by the end of May.
     
  2. Mike in Ohio

    Mike in Ohio Well-Known Member

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    Farm Credit Services (of mid-america)! Their Website is: http://www.e-farmcredit.com. They cover Indiana, Kentucky, Ohio and Tennessee. I'm sure there are other ag financial cooperatives that cover your area. Here's a link to help you find one in your area:

    http://www.farmcredit.com/

    I haven't done operating loans through them but I have done 3 property loans. They rock! Easy to work with, competitive rates, accurate and timely with the paperwork.

    Also, they understand agriculture. Enough said.

    As usual, just my 2 cents. Good luck.

    Mike
     

  3. Jena

    Jena Well-Known Member

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    All my farm loans are through my local bank.

    You need to develop a relationship with a banker in the area where you plan to farm. To begin with, go in with a balance sheet, including your net-worth, a cash flow and a written plan of what you are going to do. Include all your experience, references, education, etc that lets them know you can do the job.

    You will also need the regular stuff...credit reports, pay stubs, etc.

    If they deny you, then start looking at other options. Ask them what you need to do in order to get the loan, or start shopping the government loan programs. I have one state loan. I did that one to get a lower interest rate. It is still through my local bank.

    I, personally, do not like farm credit. I've heard too many horror stories of them micro-managing operations or denying operating loans with little or no warning. My banker has an idea of what I do, but he never comes out to check up on me. He would also let me know if he thought I was heading for trouble in the form of further denied loans.

    There are several relationships I consider to be of the utmost importance in farming. The banker is pretty high on the list.

    Jena
     
  4. TXlightningbug

    TXlightningbug Well-Known Member

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    Hi, Bergere,

    Some folks are unaware that there is a Small Agricultural Business Administration. Just another option to check out!
    Good luck! Judi :yeeha:
     
  5. doohap

    doohap Another American Patriot

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    You may consider visiting your local Natural Resources Conservation Office. The representative and his assistant in our area are good, local people who know agriculture and resources management in the area. There are many programs to apply for from financial help with cross-fencing and other construction projects necessary to farming to actually coming out to view your property and advise on things such as pond repair. They are a great source of information, much of which is freely given. They may have knowledge of other financial assistance available in your area.

    I know that many of us try to stay as far away from government agencies of any sort, but within some of those agencies there are real people who want to help. Frankly, we need and are grateful for sincere help.

    Peace and smiles,
    doohap
     
  6. bergere

    bergere Just living Life

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    Thank you so much everyone for the ideas. Will be checking each one out throughly. :)
     
  7. BCR

    BCR Well-Known Member

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    Go to SCORE.org for free confidential small business counseling. They will help you write a business plan and prepare for the loan application process. You can request someone with experience with ag loans. Try out "Counselors to America's Small Business"!

    Check out the SBA online as well.
     
  8. RAC

    RAC Guest

    Bergere, do you have to go with an Ag Loan, or can you go with a Home Equity Line of Credit (HELOC)? Yes, it's on your house, but any loan will be on your house (that's why they want to know about your assets). Depending on how much money you need, it might work for you.

    Do you have family that can either loan you money or go into it with you as a partnership? Better to pay a family member a fair interest rate (as long it is within a couple of points of the market rates, and you and they report it, it is deductible as an expense for you) than some bank, and you save a lot of money in qualifying fees. Maybe they provide some animals/plants, you provide the work.... Might as well look into beekeeping as well, even if only on a small scale....

    Hope this helps.
     
  9. bluereef

    bluereef Active Member

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    I have to concur with Farm Credit Services, www.farmcredit.com.

    We bought our first lot with them a few years back, on the recommendation of our buyer representative realtor. Even though we were from out of state (but buying land in their state), they worked with us easily, were super helpful, and had very reasonable rates and a good variety of loans to choose from. When we decided to upgrade to a larger lot, we didn't hesitate to use them again.

    Plus, they're not for profit, so you feel a little better that they're not trying to take advantage of you.

    Oh, and if interest rates drop after you close on the loan, they'll convert to the lower interest rate for a one time processing fee of $250--without having to refinance! Does your bank do that??
     
  10. Jena

    Jena Well-Known Member

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    Farm loans do not go against your house. At least none of mine do. If I defaulted on my farm loans, they cannot take my home. They can take everything else I own, including the cows and chickens, but they can't take the house!

    I am not a fan of any type of loan against your home, except a mortgage for purchase money.

    Jena
     
  11. bergere

    bergere Just living Life

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    RAC , Sadly we are on our own, no family to help. We have family in AK (teachers), his mother down in Oregon, family in Canada, the UK and my family in TN/NC and New England.
    We should get a little money, when this house sells, but not much.

    Because of DH not having a job, and my medical bills, well, lets say there is no money standing around. Savings was tapped a couple of years ago. Sigh ~ ~

    We do not plan to borrow much, just for the bare basics to get a start. Plan to start quite small and work our way up.

    Of all the places we have lived, this state is the Hardest to sell any handmade items. In this area, folks want to take everything off your hands for free. :no:
    Gets pretty tiring. (had no problems selling my stuff, anywhere else in the country) Maybe things have changed else where too,, I just do not know.
    Am using EBay a bit, but with mixed results.

    I handspin yarn, am re-learning to paint (Painting a picture of a Draft team of Suffolk Punches, working right now).
    DH can build nice dry rock walls, can see one on my web page. Works in the Kitchen garden and Orchard,, he does all the heavy stuff I can no longer do.
    Is a hard worker, but there is not much of a call for these types of walls here.
    Quite frustrating. Sigh ~ ~ ~
     
  12. RAC

    RAC Guest

    Thanks for setting me straight, Jena--I didn't know that.
     
  13. Mike in Ohio

    Mike in Ohio Well-Known Member

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    Just to concur with Jena,

    None of my farm loans use my house as collateral. The other negative in using a home equity loan to fund your farm activities is that it could cause you tax problems if you aren't careful.

    Mike
     
  14. Don Armstrong

    Don Armstrong In Remembrance

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    I stumbled across http://www.buzgate.org just a little while ago. It's a portal site providing links to small business development information for each state. It definitely includes sources of finance among many other things.
     
  15. Jena

    Jena Well-Known Member

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    Honestly, if you don't have any money or assets, it is unlikely that you will get a regular ag loan but...

    I know people who have gotten grants from SARE for different projects. I don't know if the deadline is past for this year, but it is something to look into. Also check with rural redevelopment grants, but I'm pretty sure you have to be a group of some kind, not just an individual to get those.

    There might be other programs like that for organic or whatever. I don't know, but it's worth looking into.

    Jena