Agricultural Finance

Farmers require money for various agricultural activities at various stages. There are financers which provide loans to the farmers depending on their requirements. The farmers can take loans to fuel their farm requirements or they can take loans for the farm equipments as well.

The equipments are the essential requirement of the agricultural activities. But mostly the farmers find it difficult to arrange finances for purchasing the equipments for their farms. Such farmers can take loan from various financers.

If you are looking for equipment financing then you can raise fund either as leasing or loans. The financers have various conditions for the loan. They look into you credit history and whether you have been practicing farming for few years or whether you are new to the agriculture field. The financers prefer to give equipment loans to those farmers who have worked in the farms for some time that is they have a previous history of farming.

Thus the new entrants are mainly left with the option of leasing. The leasing is also a good option as you can use the equipment by paying certain amount of money to the lender and then after the term is over you return the equipment to the lender. There is an option of buying the equipment at the end of the term of lease. Thus although you are not having the option of ownership of the equipment still you can use it. This method is cheaper than other sources of finance. You also have the option to have new equipment with more improved technology after you lend up the previously leased equipment.

For the farmers still in the business the loans are available on the basis of their requirement and their credit history. They also have the option of leasing. Equipment loans are like the auto loans given by the financers. They may be of the secured or unsecured type. In secured loans you have to place collateral with the financer while in unsecured loans the collateral is not required. The two also differ in the rate of interest which is higher for the unsecured category.

So, if you are looking for any equipment loan then make a list of what you actually need. Find out the equipment and their price. After that you find the financers giving such loans. Compare them on the basis of their conditions and the interest rates.

The financers are also extending the livestock loans and loans for the crop production. But again here also a comparison is to be made among the various banks.