Equipment Needed to Start a Farm

Starting a farm can be an exciting and rewarding venture. Whether you plan to focus on livestock farming or crop production, having the right equipment is key for your success. In this blog, we will explore the various types of equipment needed for a farm, including general farm equipment, livestock farming, and crop farming equipment, as well as other factors to consider when evaluating options.

Determining Equipment Needs

Before diving into the specific types of equipment, it’s essential to assess your farm’s unique needs. Consider factors such as the size of your operation, the type of farming you’ll be engaging in, and your budget. Taking the time to evaluate these aspects will help you make informed decisions when it comes to purchasing a piece of equipment and what farm equipment loan could be best for you.

General Farm Equipment

General farm equipment forms the backbone of any agricultural operation. These versatile tools are used for a wide range of tasks, big and small, and are essential for day-to-day farm operations. Below are the main pieces of equipment and their definitions:

Tractor: Tractors are the workhorses of any farm. They provide the power and versatility needed to perform a variety of tasks, from plowing and tilling to hauling and lifting heavy loads. 

Cultivator: A handheld or machine-operated agricultural tool used for breaking up and loosening soil, removing weeds, and preparing the ground for planting.

Seeder: A device or machine used in agriculture to evenly distribute seeds onto the soil surface for planting purposes.

Sprayer: Used to apply liquid pesticides, herbicides, fertilizers, or other chemicals onto crops or plants for pest control, weed management, or nutrient supplementation.

Baler: A baler is a machine used in agriculture to compress and bind harvested crops, such as hay or straw, into compact and manageable bales for storage, transportation, or feeding livestock.

Implements and Attachments for Various Farming Tasks

To complement your tractor, you’ll need a range of implements and attachments for specific farming tasks. These may include: 

  • Truck with trailer
  • Vehicles
  • Plows: used to turn over the soil, break it up, and prepare it for planting by burying crop residues and weeds.
  • Harrows: consisting of metal discs, spikes, or teeth arranged in a row or frame, used for breaking up soil clods, leveling the ground, and preparing the soil for planting.

Livestock Farming Equipment

If you plan to venture into livestock farming, there are specific equipment requirements to ensure the health, well-being, and efficient management of your animals.

Feeding Systems and Equipment

Proper feeding is vital for livestock health and productivity. Depending on the type of animals you’re raising, you may need feeding equipment such as: 

  • Troughs: Troughs are long, narrow containers or channels used in farming to hold and supply water to livestock, allowing for convenient access to hydration and efficient water management.
  • Feeders: Devices or structures used to store, distribute, and provide feed or fodder to livestock. 
  • Automated systems: Ensure consistent and controlled feeding.

Handling and Animal Health Management Tools

To handle and manage your livestock effectively, you’ll require equipment such as: 

  • Chutes: Chutes are narrow, enclosed passageways or channels designed to guide the movement of livestock, facilitating safe and controlled handling, sorting, or loading of animals.
  • Gates: Gates are movable barriers or entrances typically made of metal or wood, used in farming to control the movement of livestock, restrict access to certain areas, and provide a secure enclosure.
  • Panels: Panels are rigid structures, often made of metal or wood, used in farming to create temporary or permanent enclosures, partitions, or barriers for containing livestock or defining specific areas within a farm or ranch.
  • Scales: Scales are measuring devices used in farming to determine the weight of livestock, produce, or other agricultural materials, providing accurate measurements for monitoring growth, assessing yields, or ensuring proper portioning. 

Additionally, animal health management tools like vaccination syringes, hoof trimmers, and dehorning equipment are essential for maintaining the well-being of your animals.

Housing and Fencing Requirements

Providing suitable housing and fencing is crucial for the safety and comfort of your livestock. This may include barns, sheds, or pens, along with sturdy and secure fencing to contain your animals and protect them from predators.

Crop Farming Equipment

For those focusing on crop production, having the right equipment is essential to maximize efficiency and yield.

Seeders, Planters, and Transplanters

Planting crops efficiently and accurately is critical for successful food crop farming. Seeders, planters, and transplanters are specialized equipment that ensures precise seed placement, optimal spacing, and uniformity. In crop farming, the strategic application of fertilizer plays a crucial role in promoting healthy plant growth and maximizing yields. This requires compact machinery that can efficiently navigate through narrow rows and tight spaces, ensuring precise planting, cultivation, and harvesting operations.

Irrigation Systems for Optimal Crop Watering

Irrigation plays a vital role in crop farming, especially in areas with irregular rainfall patterns. Installing an efficient irrigation system, such as sprinklers or drip irrigation, can help ensure that your crops receive the right amount of water at the right time, promoting healthy growth and higher yields. 

Harvesting Equipment and Grain Storage Facilities

When it’s time to harvest your crops, having the right equipment can make a significant difference in efficiency and quality. Harvesting equipment, such as combine harvesters or specialized machinery for specific crops, can streamline the process and minimize large losses. Additionally, you’ll need suitable grain storage facilities to protect and store your harvested crops.

Evaluating Equipment Options

With a wide range of equipment available, it’s essential to evaluate your buying options carefully. Here are some factors to consider when choosing equipment for your farm.

Factors to Consider When Choosing Equipment

Consider the specific requirements of your farming operation, including the size of your farm, the nature of your crops or livestock, and the tasks you need to perform. Take into account factors like durability, ease of use, maintenance requirements, and compatibility with existing utility equipment. Evaluate the reputation and customer reviews of manufacturers to ensure reliability. 

Quality, Brand Reputation, and Pricing

Investing in high-quality equipment from reputable brands ensures durability, reliability, and long-term performance. Customer service should be a factor when deciding between brands. While quality is essential, it’s also crucial to consider pricing options that fit your budget. Explore different suppliers and compare prices to find the best balance between quality and affordability.  

New vs. Used Equipment and Financing Options

When starting a farm, you may have the option to purchase new or used equipment. Farmers can find used equipment can be more affordable, but it’s important to inspect and evaluate its condition before making a decision. If financing is necessary, explore loan options specifically tailored for agricultural equipment. Evaluate interest rates, repayment terms, and potential tax benefits associated with financing to make an informed choice.

Conclusions on Equipment Needed to Start a Farm

Starting a farm requires careful consideration of the equipment needed for your specific farming activities. Whether it’s general farm equipment, livestock farming equipment, or crop farming equipment, each plays a vital role in your farm’s success. By evaluating your needs, considering factors like quality and pricing, and exploring financing options, you can make informed decisions and set yourself up for a successful farming venture. Remember, the right equipment is an investment that can contribute to increased productivity, efficiency, and profitability on your farm.

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Boost Your Credit Score in Just 30 Days: 7 Effective Strategies

 7 Effective Strategies

1. Write a Goodwill Letter: If your credit report shows a minor blemish, such as a single late payment, and the rest of your credit history is strong, you can try appealing to the issuer for leniency. Make a compelling case explaining why the negative record should be forgiven and removed from your credit report. You can call the issuer directly or draft an official “Goodwill Adjustment Letter” to formalize your request. This strategy is most effective before the negative record appears on your credit report, but it’s worth a try afterward as well.

Below is a goodwill letter template you can copy and paste into your own word document and fill in with your own details. Having problems? Contact us and we will send you your own file to use. 

2. Reduce Your Credit Card Statement Balance: Lowering the balance on your monthly credit card statement can significantly improve your credit score. By decreasing your credit utilization ratio, which is calculated by dividing your balances by your spending limits, you demonstrate responsible credit management. Try spending less, making larger payments, or paying your bill more frequently. Consider paying your credit card bill twice a month, once before your statement is generated and again before the due date, to lower your credit utilization and avoid interest charges.

3. Make a Big Debt Payment: The amount you owe, relative to your income, plays a crucial role in determining your credit score. Lenders assess your risk level based on this information. Paying off a substantial portion of your debt can have a positive impact on your credit score. Aim to reduce your outstanding debt to enhance your financial standing.

4. Dispute Credit-Report Errors: Review your credit report carefully, comparing each item with your financial records. If you come across any discrepancies or suspicious information, investigate further and take action. If there is incorrect or fraudulent data, file a dispute with the credit bureau to have it rectified. Removing inaccurate negative information can lead to significant short-term improvement in your credit score.

5. Become an Authorized User: If a family member with excellent credit is willing, request to be added as an authorized user on one of their credit cards. Ideally, choose an old account with a high credit limit and a clean payment history. While this strategy may take longer than 30 days to process, it can provide a quick boost to your credit score once implemented.

6. Dispute Negative Authorized-User Records: It’s not widely known, but as an authorized user on an account that is negatively impacting your credit score, you have the right to request its removal from your credit report. Since authorized users aren’t responsible for paying the bill, you can dispute its inclusion on your report. File a dispute to address any adverse effects caused by such accounts.

7. Request a Higher Credit Limit: Increasing your available credit can positively affect your overall credit utilization ratio, a key factor in determining your credit score. However, before requesting a higher limit, be aware that some credit card issuers may perform a hard inquiry, which could temporarily impact your credit score. Understand your creditor’s policies beforehand and ensure that your credit limits are accurately reported by asking the issuer to update the information with the credit bureaus. Keep in mind that “NPSL” credit cards may have limitations in this regard.

By implementing these seven strategies, you can work towards raising your credit score within a month. Remember, responsible financial habits and proactive credit management are key to long-term credit health.

How to Build Credit

Farmers of all levels of experience have a need for capital, and many times that means they will need to borrow money.  Whether expanding the farm with a purchase of some additional acreage to your third generation family operation or buying your very first tractor, one of the most important factors for getting the purchase made is a farmer’s personal credit score.

Get Your Credit Report and Score

First things first, it’s very important to know where you currently stand on your credit score.  There are tons of free resources online to get a credit report and your score, such as at Experian.  Many times your credit card issuer will also provide you with your credit score.  It’s also very responsible to check your credit report to see if you have any errors, new or old, on your credit history.  This could be self-inflicted, an error with a creditor, or possibly fraudulent activity.

Credit scores range from 300 up to 850.  Below is a description of each range of credit scores:  Poor, Fair, Good, Very Good, and Excellent.

Credit Cards

After you know your current credit score, you can now understand your baseline and where you need to improve.  If you don’t already, getting a credit card is an easy way to start your credit building journey.  The most crucial part of credit card ownership is responsibility.  To increase your credit score with your credit card, you need to pay it off every month.  If you carry a balance month over month, you will be subject to extremely high interest payments, as well as the potential for lowering your credit score.  This is a lose-lose situation.  To be in a win-win situation with credit cards, only spend on the card what you can comfortably afford each month (use it for expenses you would have paid cash for anyway) and pay it off every single month.  This will help you live within your means, build credit, and maybe earn some credit card rewards to treat yourself with for being a good steward of your money.

When getting a credit card to build credit, you can shop exclusively for credit-building cards or products with a credit card company or bank, so be sure to let the vendor you are inquiring with what your goals are for credit building.

Get a Co-signer

If your credit score and history are less than optimal, you might need to start small and make sure you have a quality co-signer to sign on a loan with you to help you get approved.  You and your co-signer also have to understand that if you cannot pay your loan, the co-signer is responsible for the loan repayment.  

Building Good Credit with Good Practices

For those that have and use credit cards, be sure to keep the utilization (how much of the credit limit you spend on the card each month) under 30% on all of your credit cards.  Creditors want you to use your cards, but not too much.  This shows responsible usage and spending habits.

Another way to help your credit score is to minimize applying for multiple credit cards at one time.  If you plan to add another credit card to your total accounts, be sure to space out applications at least 6 months apart.

This leads into our next tip: total credit accounts.  Closing credit accounts and credit cards can actually hurt your credit score.  So if you pay off a credit card and don’t want to use it anymore, it’s a good idea to use it every few months to keep the card active.  Credit scores are built by your average age of credit (how long all of your credit accounts have been open) as well as the total number of credit accounts.  Credit bureaus like to see your average age of credit no lower than 6 years, but 9 years or more is what leads to Excellent ratings.  

It might seem crazy, but creditors also see creditworthy applicants with 12 or more credit accounts.  Now don’t go off the deep end and start getting a ton of accounts open all at once.  Total accounts have a low impact on overall credit scores and credit building.  As we discussed above, opening a bunch of accounts in short succession is very bad for your credit.  

Lastly and most importantly, make your payments on time.  And pay off your credit cards in full each month.  Carrying a balance is bad for your credit and it costs you so much more in interest (credit card interest is usually 24% or more, and interest is charged on your balance, and any interest you carry, so it adds up extremely quickly).  If you are unable to pay the whole card balance back in one month, pay as much as you can, but at least make the minimum payment.  And make a plan to pay the rest of the balance off as soon as possible.

When purchasing homes, real estate, and cars you do have the freedom to apply for more than one loan on a particular purchase and it won’t negatively affect your credit score.  If you apply for a home loan with 3 different lenders within a 14-45 day period (this depends on the credit bureau and the lender) this will only count as one instance of applying for credit.  If you are unsure of your window for rate shopping, stick to the 14 day window for applying for loans.  

If you apply for a home mortgage, it is recommended that you do not apply for a car loan or a new credit card at the same time as this will likely hinder your home loan application and approval.  You should also wait 6 months after a home purchase to apply for a car loan, or vice versa.

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How to Write a Farming Business Plan: Template and Guide

How to Write a Farming Business Plan: Template and Guide

Starting and running a successful farming business requires careful planning and strategic decision-making. One essential tool that every farmer should have is a well-crafted farming business plan. A comprehensive business plan serves as a roadmap for your agricultural venture, guiding you through the various stages of development and ensuring that you stay focused on your goals. We will provide you with a step-by-step guide on how to write an effective farming business plan and start you off with a template. 

Overview of a Farming Business Plan

Before diving into the specifics, let’s take a moment to understand what a farming & agriculture business plan entails. Essentially, a farm business plan is a written document that outlines your farming objectives, strategies, and financial forecasts. It serves as a blueprint for your farm’s operations, helping you make informed decisions and communicate your vision to potential investors, lenders, or partners.

The Purpose of a Farming Business Plan

The farming business plan is going to define and communicate your farm’s mission and goals. It helps provide a clear direction for your operations, resources, and ensures that everyone involved in the business is on the same page. Additionally, a well-crafted business plan is often required when seeking financing or partnerships. Lenders and investors use it to evaluate the viability and profitability of your farming venture.  

Key Elements of a Farming Business Plan

Let’s explore the elements that make up the Farming Business Plan. 

Executive Summary

The executive summary is a brief overview of your entire plan. It should summarize your farm’s mission, goals, target market, and competitive advantage. While it appears at the beginning of your plan, it is often written last to ensure that it accurately reflects the content of the document.

Market Analysis

A thorough market analysis is crucial for understanding your target market, identifying potential customers, and evaluating your competition. This section should provide detailed information about market trends, customer demographics, and demand for your products or services. Conducting market research and gathering data from reliable sources will strengthen the credibility of your analysis.

Products and Services

In this section, describe the specific products or services your new farm will offer. Provide details about their features, benefits, and how they meet the needs of your target market. Discuss any unique selling points or competitive advantages that set your offerings apart from others in the industry.

Marketing and Sales

Outline the strategies for promoting and selling farm products. Explain how you plan to promote your farm and reach your target market. Include information about your pricing strategy, distribution channels, and any partnerships or collaborations that may enhance your marketing efforts. Developing a comprehensive marketing plan will help you attract customers and generate sales. 


Describe the operational processes and workflows involved in running the farm, including land preparation, planting, harvesting, livestock care, and post-harvest handling. Highlight the management structure, key personnel, and their roles and responsibilities.

Financial Plan

The financial plans are a critical component of your farming business plan as it demonstrates the financial viability and sustainability of your farm. It should include projected income statements, cash flow statements, and balance sheets for the next three to five years. Additionally, outline your funding requirements and any existing or potential sources of financing. 

American Farm Financing offers many financing options to fit your needs: operating loans, cash rent loans, farm mortgages, refinances, and equipment loans. See all AFF loan options.


Setting Financial Goals

Forecasting expenses is critical when starting a farming operation. List out the main buckets of expenses (inputs, machinery, labor, land, interest, and consulting services). Where possible, get pricing quotes to formalize your expenses as much as possible for what you would like to grow.

After you’ve forecasted expenses, you can set a goal for how much profit, or margin, you intend to make. Use futures sales prices to project what you can sell your crop for. The difference between your sales price and your expenses will become your profit. Ensure that this income matches your expectations and can cover any personal expenses you hope the money will be used for.

While a one-year operating plan is critical to get started, remember that farming is a long-term pursuit. Depending on how many upfront expenses you need to make, it may take multiple farming seasons to turn a significant profit. 

Conducting Market Research

Before you can develop a solid business plan for a farm, it is essential to conduct detailed market research. Conduct an analysis of the target market, including its size, growth potential, and trends. Identify the target customers, their needs, preferences, and buying behavior. This assessment will allow you to be an expert on the market and differentiate you from the rest of the competition. 

Writing a Farming Business Plan

Now that we have covered the key elements of a farming business plan, let’s dive into the process of writing one.

Creating a Timeline for Implementation

This timeline can be as specific to your needs as possible. You want to make sure that every necessary box is checked before launching your farming operation. This is a suggested timeline for implementing your plan, but coordinate as you see fit and adapt to things that may pop up:

Preparation: 1-6 Months 

  • Complete all sections of the farming business plan, including market analysis, financial projections, and operational strategies.
  • Seek funding options, such as loans, grants, or investors, and secure the necessary financing for your farming venture.
  • Identify suitable land for your farm and negotiate the purchase or lease agreement.
  • Conduct necessary soil testing and prepare the land for farming activities.
  • Source and purchase farming equipment, machinery, and inputs (seeds, fertilizers, livestock, etc.) required for your chosen agricultural activities.
  • Hire key personnel, such as farm managers, laborers, and administrative staff, as per your business plan’s organizational structure.
  • Establish relationships with suppliers and vendors to ensure a steady supply of inputs.


Operations: 6-12 Months

  • Initiate planting or livestock management based on the farming plan.
  • Implement appropriate cultivation techniques, crop rotation, or livestock management practices.
  • Monitor and adjust farming operations to optimize production.
  • Develop marketing strategies to promote farm products to target customers.
  • Implement sales channels, such as direct sales, farmers’ markets, online platforms, or partnerships with retailers or small restaurants.

Below is a helpful template from fsa.usda.gov to get you started.
Download your farming business plan template here.

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How to finance farmland: A Complete Guide for Aspiring Farmers

The Benefits of Financing Farmland

Obtaining financing is a major part of operating farmland. Whether to grow operations with the purchase of a new farm or to buy inputs and machinery, the right financing can provide quick and reliable capital. We’ll explore the types of financing available, eligibility requirements, and some tips for successful farm financing.

Types of Farmland Financing

When it comes to investing in farmland or expanding an existing agricultural operation, securing the necessary financing is critical. There are various types of farmland financing options available to farmers and individuals interested in agricultural ventures. Let’s explore a few types of financing options that you can get through American Farm Financing.

Farm mortgages are a popular choice for individuals looking to purchase farmland. These long-term loans are typically secured by the land itself, providing lenders with collateral in case of default. Most farm mortgages offer both fixed and variable interest rates across several maturities, allowing borrowers to spread their payments over several years. 

Farm operating loans are short-term financing solutions designed to cover day-to-day operational expenses. Farm operating loans offer flexibility and can be crucial during periods of fluctuating commodity prices or unexpected expenses.

Farm equipment loans are specifically tailored to help farmers acquire essential machinery and equipment. Modern agricultural operations rely heavily on technologically advanced equipment to increase efficiency and productivity. These loans often have longer repayment terms, allowing farmers to spread the cost of expensive equipment over several years.

Farmland financing plays a vital role in the success and growth of agricultural ventures. Understanding these different types of financing can help individuals make informed decisions and secure the necessary funds to pursue their agricultural aspirations.

Eligibility Criteria for Farmland Financing

Most farm lenders need to know the use of proceeds for any financing. For farmland purchases, a borrower would need to present an executed purchase agreement. For machinery and equipment purchases, most farm lenders would need a proof of purchase and the seller’s details to ensure they will complete the transaction. 

Operating loans are usually more fluid. Expenses made under an operating loan need to be toward farming purchases but a receipt need not be given for every expense.

There are a wide variety of farm lenders. Larger institutions usually lend to borrowers with Good to Excellent credit. Some digital lenders work with lower credit applicants as well.

Most farmland loans require heavy down payments (between 20 and 35%). Farmland is deemed a slightly riskier asset compared to homes, and as such, has higher rates and down payment requirements.

The process of financing your farm with American Farm Financing 

Our easy-to-use digital Ag financing applications take a few minutes to complete. You’ll learn if you’re approved for any of our Ag loans as soon as you hit submit – no waiting around for bankers or paperwork. We’ll confirm your information and work through all closing to-dos (including appraisal and title work for farmland loans). Get back to doing what you love – with more time and money in your pocket.

Tips for Successful Farmland Financing 

Successfully securing farmland financing requires careful planning and consideration. Before seeking financing, develop a comprehensive business plan that outlines your goals, strategies, and financial projections. Make yourself familiar with the terms and be sure to compare various lenders. It’s helpful to understand their specific lending criteria, interest rates, repayment terms, and any additional fees or conditions attached to the financing. 

Seek guidance from professionals experienced in agricultural financing, such as agricultural loan officers, financial advisors. These specialists can provide valuable insights and help you navigate the complexities of the industry, ensuring you make informed decisions and choose the most suitable financing options for your specific needs.

Farm Financing serves as a valuable resource for individuals seeking to acquire land and pursuing agricultural ventures. By providing access to upfront capital, our loans allow farmers and investors to overcome financial barriers and seize opportunities for expansion. American Farm Financing offers quick and efficient digital applications so the process becomes streamlined, enabling farmers like you to focus on their agricultural goals while saving time and money. Start your application with us here.

Below is an example video of the application process. 

Ready to find financing that works for you? Begin your application below.

Operating Loans?  Term Loans?  Farm Mortgages?  Which Loan do I Need?

When starting a farming operation and seeking capital to get you in motion, there are a handful of farm loans a new farmer has to get familiar with to be successful.  Let’s discuss these loans and what makes them each a tool in your farm finance tool chest.

Operating Loans

Operating loans are short term loans that help pay for your daily farm expenses.  These expenses are your annual expected costs to run your farm business throughout a growing season.  Below are some bullet points about what you can use your operating loan for, length (timeframe) of the operating loan, what collateral the loans require, and what type of interest rates to expect:

  • Most operating loans are a one-year term.  The loan balance is repaid on the loan maturity date, or the expiration date of the loan.
  • Operating loans are commonly revolving credit instruments:  this means as you use the loan throughout the growing season and make repayments, you can access that capital again if you need to. Here’s an example below:
    • Farmer has a $100,000 operating loan.
    • Farmer uses $25,000 to pay for seed in February, leaving Farmer with a loan balance of $25,000 and available capital of $75,000.
    • Farmer pays back $10,000 of the loan in March and now has a balance of $15,000 on the loan and $85,000 in available capital to use for farm expenses. 
  • Operating expenses usually include seed, fertilizer, labor, cash rent for land, and fuel.  
  • They can have fixed or variable rates of interest.  Interest is paid when the loan matures and final payment is due.  
  • Operating loans require collateral, as do most loans.  Collateral usually includes liens on crops, livestock, and farm equipment if necessary.

Intermediate or Term Loans

Intermediate or term loans are short term loans that help pay for farm equipment or livestock. You can find information below about the characteristics of term farm loans:

  • Term loans typically vary in length of time from one to seven years.  The loan balance is repaid with a structured repayment plan.
  • Term loans are commonly used to buy tractors, combines, implements, livestock, or farm buildings/structures.
  • They can have both fixed and variable rates of interest.
  • Collateral for a term loan is commonly the asset that the loan is used to buy.
  • Term loans generally have a Loan-to-Value (LTV) ratio, meaning a lender will only lend up to a certain amount of the purchase price. 

Farm Mortgage and Refinance Loans

Farm mortgages are loans used to purchase farmland.  Farm refinance loans are used to restructure a current farm mortgage to achieve access to equity to improve the land itself or to acquire a lower interest rate.

  • Farm land loans can be as short as one year long and up to 30 years.  The farm loan balance is repaid with a structured amortized repayment plan.
  • They can have fixed or variable rates of interest.  Usually, variable rate loans have a period of time the rate can be floating (3 or 5 years out of a 30 year loan).
  • Collateral for farm land loans is the land that the loan is used to buy, and any other land that is pledged as collateral to lower the amount due at signing or to help with the down payment requirements.
  • Land loans have a Loan-to-Value (LTV) ratio.  This means that a lender will only lend up to a certain amount of the purchase price of the land.  Below is an example of a common farm loan scenario:
    • Farmer wants to buy 50 acres of tillable land for $500,000.
    • A farm mortgage at this amount typically has a LTV of 75%, meaning that the bank will only lend up to 75% of the land’s appraised value.
    • Farmer secures a loan for $375,000 to purchase the land for $500,000, and either pays in cash the $125,000 down payment; or, uses some of their land that is owned free and clear as collateral to cover the down payment required.