Tuesday, September 13, 2016

Financing A Farm By Doing Farm Loans

By Kenneth Green


A capital that is borrowed may be an expensive cost for growers who decides of putting up a small farm. Producers loan to be able to give best supplies to seeds, fertilizers, and other product inputs. Competition between banking industries is already increasing because of the increased demand of loans. They compete for better loans so they can lend it to producers. And to be able to keep better services than other banks, they usually offer lower loan fees, lower interest rates, and some other services.

It is important that you must compare the loans from different bank industries carefully. And also, always be prepared. If you will go to a bank to ask if how much money you can borrow, be prepared before going there. Business plans like farm loans should have several documents that are to be presented during application.

When you apply for a loan, you need to prepare and provide several documents. First document that is needed is your resume. This should contain your personal background, your working experience in some other farms, and as well as your education. And also, provide copies of your income tax returns for the last three years.

All documents for your financial statements should also be included. These statements include balance sheets, where all your assets and liabilities are listed. Next is income statement, a statement for profit and loss in the past year. And lastly is you develop a flow of cash budget, which shows your funds and sources for the past year.

Titles of your real estates and of your personal properties may be required as well. Serial numbers and identification numbers of the new equipment must be included as well. You also present a list of your outstanding loans if any, and include each account number and also the growing crops that are produced if it is included in assets.

A map that shows the field of crops production should be included, as well as the cropping plans. The map must also include information of the lease agreement and ownership property current status. Liabilities, crops, and equipment insurances are important as well. Information of insurances for policy numbers, coverage amounts, and carriers are also needed.

A marketing plan is also important when you want to loan. So if there are any sale contracts, you must include it. These marketing plans will give the bank an assurance that you really do understand the regulations and that you did your part for crop production and for live stocks.

You can ask a lot of questions to the lender so that you can understand and know more about the application. They may give you a charge for the documents. Be sure to know what really are these costs and if these are going to be paid by you. Be sure to ask if that cost will be part of the loan or it is separate.

So in conclusion, to obtain a capital for putting up a small farm needs a lot of preparation before you can apply. The most important thing here is that the lender must be assured that the borrower can be able to repay the loan. You can also ask help from agencies for some concerns.




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