Running a farm business needs the same effective and strategic business plan and consistent cash flow as other mega and small businesses. Unexpected expenses are common whilst running a farm business. We hope you don’t get stuck in a financial position, but whenever you need an extra bump of cash to cover the hurdles cost by bad weather or when you are experiencing a bad harvest season, Merchant Advisors’ small business loans are just a call away.
We understand the importance of consistent cash flow to run a successful farm business. From purchasing seasonal seeds and fertilizer to update the machinery or to purchase the land, money is required every step of the way. The best thing about running a farm business is that you can pay back all the loan once you get money after the harvest.
Most of the lenders are offering small business loans to farmers, but since farmers are failing to earn significant profit they are unable to make all the repayments on time. Lenders look for consistent cash flow, but does this mean lenders should stop offering loans to people running farm businesses? From traditional and alternative lenders to banks, financing and funding option are endless.
Before we move onto the four simple ways you can use a small business loan to your benefit, let us explore the potential funding options.
Traditional lenders are offering small business loans for your farms at affordable rates. As the repayment history on the part of the lenders, the traditional lenders are a bit reluctant to offer loans at the lower interest rate. Now, when a farmer applies for a small business loan from a traditional lender, the lender asks for multiple financial documents to prove the stable financial position of the small business owner.
If you are the owner of a ‘good’ credit score, then you can apply for a traditional loan and will get the funds at a reasonable rate.
Small Business Administration (SBA)
SBA says, “Agriculture can be one of the most satisfying and rewarding ways to make a living.” They stand by it and through United States Department of Agriculture Rural Development they are offering farm loans to farmers. Applying for a farm loan is a simple process, and the borrower is allowed to use the loan for conversion, repairing, development of the farm. As a borrower, you can use the funds to purchase the needed equipment. Explore business loans by the SBA and weigh their pros and cons before making a final decision.
If your farm is generating $100,000 as of the annual revenue, then you are an ideal candidate for a small business loan for your dream farm. A farmer can get a loan amount ranging from $5,000 to $500,000. The qualification criteria of the alternative lender are relaxed, but default on the loan payments leads to severe penalties and consequences.
Business loan options provided by alternative lenders:
1- Term Loan
2- Business Line of Credit
3- Merchant Cash Advance
4- Equipment and Invoice Financing
Four simple ways to use Small Business Loans
Whatever your financial problem, a small business loan is there to rescue you. You should be confident enough in your farm, business plan, and financial stability. Apply for a business loan so that you can easily use the funds in the following ways:
- Update your machines!
From steam tractor to threshing machine, you can use, a small business loan to buy whichever machine you want. You can even invest the money to install a backup generator to eradicate the hindrances caused by the electrical malfunction.
Use the funds to buy the agricultural machine that you use the most so that a piece of broken equipment won’t cause a delay in the delivery. The goal is to keep all the things running smoothly so any technical error can’t put a stop to the incoming cash flow. Apply for Equipment Financing, right away!
- Increase your workforce!
As a farmer, you must be familiar with the scenario when a farmer can’t proceed with the day because the person operating the threshing machine is on leave. An absence of one person can put you behind schedule. Don’t let your farm suffer anymore!
You can use the funds to hire more people to tackle the tasks at hand more efficiently. Often, the lack of cash flow can convince you to let go of people, but you must consider all the hard work that they do. Weigh the pros and cons of applying for a small business to cover the operation costs & hiring more employees and downsizing to cover up the necessary cost of running a farm.
- Add another plant!
Seeds, fertilizer, livestock, and machines do not come for free! If you want to feed the best quality fertilizer on your land, you need to spend more money on the fertilizers. With a small business loan, you can have enough cash flow to pick the most ideal fertilizer sack for your land.
Moreover, the extra cash flow will provide enough financial support that you can introduce a new crop to your land. Crop rotation is integral to keep the land fresh, so invest money and get the seeds for a new crop. Alternative lenders, just like ourselves, are determined to offer affordable funding resources to the farmers so that they can run their farm just the way want it.
- Implement upgraded systems!
Agriculture and farming are not unfamiliar with technological advance. Are you staying up to date with the current trends? With a small business loan, you can have enough funds to implant labs where you can grow plants without soil – Hydroponics. In addition to this, the vast majority of farmers is endorsing Aquaponics. It is an ecosystem that encourages the possibility of farming plants and fish together.
Be friends with science and technology and stay ahead of your rivals.
We comprehend the massive amount of money that is required to run a fruitful farm, so head over to our website and explore the potential funding and financing options. Merchant Advisors provides reasonable small business loans to farmers. For more ideas and tips to keep your land green, you can follow us on Twitter (@Onlinecheck) and Facebook (@Onlinecheck). If you have any question, feel free to call us on our toll-free number at (833) 827-4412, our loyal and keen financial advisor will answer your every question and guide you throughout the way.