- A good credit score.
- A low debt ratio.
- 10+ years in the farming industry
- Business plan showing how you will use the money, how it will help you to turn a profit, and how you will be able to pay the money back.
- Assets that match or surpass the value of the loan.
While all lenders are going to look at these compensating factors differently, being able to present title loans North Carolina a trustworthy business profile is key to securing a loan with good rates and terms.
It is also important to shop around when looking for a loan as well. One lender might not see your compensating factors as valid, while others might. Shopping around and getting multiple quotes is key to getting the best rates and terms.
Having poor credit should not deter you from searching out financing. As mentioned above, there are many other factors that lenders will take into account when determining your eligibility.
If you are on the fence about whether or not farm financing is for you, here a just a few ways that additional funds can help you to recover from a bump in the road, or allow you to expand your business indefinitely.
New machinery and equipment: As anybody who has been close to a farm knows, agriculture requires a lot of machinery and equipment; none of which runs cheap. Updating your tractor, harvester, fencing or even your workforce can make operations move more efficiently and result in more profits. A loan such as a business line of credit can also be held in case of equipment failure.
To secure a loan with a traditional lender you will usually have to demonstrate years of profit/loss accounts, have valuable assets that you can put up against the loan, and have a credit score that is improving
Upgrading Your Systems: Pennies saved can equal thousands made. Upgrading agriculture systems such as your field irrigation can cost a lot upfront, but the long term savings can make your business more profitable once the loan has been paid.
Adding to your offering: In the unsettling ups and downs of the food market, it has never been more important to show diversity in your offering. By adding an extra crop or livestock, you widen both your safety net and money-making potential.
Hiring Farmers During a Cash Crunch: When a farm goes through a tough time with financials, it is usually the workforce that sees the cuts first. While staffing can be a big expense, losing staff can make it difficult to ever get out of a rut, and if you do you will have nobody in place to aid in the regained work.
A farm loan can help to cover wages while the farm gets back on its feet or reaches the awaited harvest date.
What Kind of Terms Does Lending Valley Offer farmers with bad credit?
Traditional Lenders: While traditional lenders will offer farms with poor credit financing solutions, their standards are very high, and it is not easy to qualify. The application process of traditional lenders can also take several weeks, which is time most people simply don’t have.
The main benefit of working with traditional lenders is that if you do qualify you will likely have the opportunity to ‘upgrade’ your loan from a short term, to a long term.
Alternative Lenders: Alternative lenders, such as Lending valley, make the farm financing process easy and quick. Using alternative lenders when you have bad credit gives you the highest chances of been accepted, while also being subject to fair terms.