Agricultural Loan:

Agricultural loans are made to farmers to finance farming activities. Agricultural loans make up about 1% of all bank loans but are an important form of lending for small rural banks. Smaller banks used about 6% of their assets to make agricultural loans. Short-term agricultural loans are usually seasonal and are used to finance the purchase of seeds, fertilizer and livestock. These types of loans usually require a lending officer to inspect the borrowers farm once a year.

Fortunately, the government often steps in with low interest loans and other subsidies that help farmers turn a profit.

Farmers can use agricultural loans to:

1. Purchase farm land. Whether you are just starting out as a farmer or wish to expand your current farm business, agricultural land loans help you purchase the land you need to build a great farm.

2. Cover operating expenses. Besides needing farm land financing, many farmers also need help covering some of the operating costs. Farm equipment is expensive, but it's necessary to run the farm. With better equipment, you can cover more land quickly.

3. Help with the marketing of their product. If they want to make a profit, then farmers need to sell the product they create. This means that they need an effective marketing plan and money to pay for marketing costs in addition to farm land loans.