Any agriculture lenders out there?

Question

Looking to explore low interest ag loans (if they exist in CO). The state has loans for women (minority) and beginning farmers as I have read.

Happy holidays,

Alex

Mason Moreland · Answer

I got you, TX fam! We specialize in AG RE investments and operations. We run one of the largest wine grape vineyard operations in the state (and east of the rockies) and syndicate capital for them. We also do traditional RE and are familiar with traditional row crop farming (though we don't do any right now).

You will want to do like @Henry Clark said first and foremost. The folks at your local USDA office need to be your friends. With row crop agriculture especially, you can live or die by what they can hook you up with (lenders/loan programs, subsidies, relief programs, insurance, other connections, etc).

Look up your local FCS (farm credit service) lenders. They will likely be able to get you the best rates possible if you can't get a fancy specialty program from USDA. I'd almost recommend using an FCS lender over anything federal at all anyways, because of the reduced headache and hair on most of their products.

Another overlooked source is SBA loans. They absolutely suck as far as having hair/documentation required with them, a lot of the lenders doing them stink, and generally federal products are yuck, BUT, they can have low interest rates and lend on some ag ventures that others won't. These are usually better loan products for specialty AG developments (vineyards fall in there), AG processing (gins, crop storage facilities, processing facilities, wineries, etc).

What kind of AG project are you getting into? That will also help steer what lender you should look towards. Also as far as interest rates., any special USDA program will likely be lowest. Interest rates are not terribly attractive right now for purchasing new traditional row crop ag land. Usually I'd bank on a 3-6% return on renting row crop ag land on a share crop basis here in TX back when INT rates were running ~3-5%. That gets you down to basically nothing right now, however, farm land prices are increasing rapidly in some areas as of late. You can make these interest rates work in some specialty crops still though.

-MM

Andrew Postell · Answer

@Alex Jacobson this might be something a bit outside of what Bigger Pockets is good at.  Certainly look into Colorado Farm Bureau or CoBank but you might want to try to connect with some Colorado Facebook Farming groups to see who people use.  That's probably a better place to ask this question than here.

Hope all of that makes sense.

Henry Clark · Answer

Contact your local USDA office and ask for programs.  You’re talking about a 1% return with say a 7% interest rate.  What kind of angle are you trying to achieve?