“Agriculture is a capital intensive industry, regardless of the margins,” says Paul Peterson, farmer and Farm Loan Manager for the Farm Service Agency. For a farmer just starting out, financing a business can be daunting, especially for young folks. Today, Jared Luhman discusses financing options for other young and beginning farmers like himself with Paul Peterson and Chris Fitzloff, a Financial Officer for Compeer Financial.
A lack of net worth, collateral cash, and experience are common barriers for beginning farmers in financing an agribusiness. Paul and Chris share some recommendations for overcoming these challenges, including bartering labor for equipment sharing with established farmers, doing custom work to reduce purchase costs, and getting organized and knowledgeable on your financials and business plan. There are also programs specifically available to beginning farmers, such as Compeer’s “Groundbreaker Program” and loans focused on character, rather than a stellar credit score.
Wherever you’re starting from, both Paul and Chris emphasize the importance of being organized, coming with a plan, and demonstrating a willingness to learn when approaching lenders. Don’t hesitate to reach out, either. Even if you don’t initially qualify, you’ll be advised on what you need to do to get there. As Paul says, “If farming’s your dream, we want to help you accomplish that.”
Listen on Spotify, Apple Podcasts, Stitcher, Podbean, or wherever you get your podcasts. You can also listen on the SFA website. Check out SFA’s Beginning Farmer Resources or this recent TC Growers meeting for more information! Episode topic suggestions, comments? Drop us a line.