Agriculture is the backbone of many economies in the world. Without good agricultural policies, nations are bound to starve – starved nations are the best. Therefore, it’s the responsibility of governments to provide a conducive business environment for agriculture to thrive. Government aid alone is not enough to help farmers. It mostly benefits large-scale farmers.
The medium and small-scale farmers seek financial assistance from other agricultural lenders who mostly offer long-term agricultural loans. Long-term agricultural loans are the most popular loans among farmers. So, are there any alternatives to these long-term agricultural loans? Read on to find out.
Alternative Loan Services
What are alternative loans services? When you google this, you will get a variety of answers without a clear understanding. However, as a borrower, you need to understand what alternative loan services are – what they aren’t. So then, what are alternative loan services? Alternative loan services are;
- Flexible– alternative lending allows lending companies to create payment plans that work best for a client. These plans help financially distressed customers in ways that traditional loans can’t.
- Customizable- alternative lending companies understand that every farmer, rancher, operator, and producer are different. They thus design products that fit each category.
- Personal– most alternative lending companies put people before profits. They take time to conduct on-site visits and consistently check on their clients.
- Alternative loan services are not;
- Long-term- alternative loan services are ideal when farmers need initial capital. Mostly, they help farmers transition into a position where a conventional loan is possible.
- A short process- accessing an alternative loan service is not a walk in the park. Relationships are fostered by the lender to help them understand customers on a deeper level.
Long-term Agricultural loans
Long-term agricultural loans are loans that have an amortization period of 25 years or more. Cooperative banks and agricultural lenders issue these loans. A reputable agricultural lender is United Farm mortgage. Long-term agricultural loans can be used to repay old debts, purchase new land, purchase agricultural machinery, among other things. They have the following features;
- Longer repayment period– as mentioned in the definition, these loans have a long amortization period mostly because they are large sums.
- Lower interest rates– the interest charged on these loans is low because of the longer repayment period. This is because the requirement for financing is more rigorous.
- Financing significant expenses– because of the large amount of money, long-term agricultural loans are used to improve a farm significantly such as scaling up your business.
Long-term agricultural loans have a rigorous application process, limited monthly cash flow, and total interest in the long term.
So, yes, there are other alternatives to long-term agricultural loans. However, long-term agricultural loans are preferable. This is because they offer their customers more secure loans. They can be relied upon and are fair on all farmers. The rigorous application process ensures all risk factors are checked. Due to their longer repayment period, clients can plan to realize their profits and pay the monthly installments simultaneously. United Farm Mortgage has been in the business long enough and offers quality services. Visit their website for more information unitedfarmmortgage.com