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Business/Careers

Three things to know about agricultural loans

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If you are in the agricultural business, you know the costs of starting up and running a farm can be overwhelming.

You may need financing, and agricultural loans are specifically designed for use in the industry.

FNNB Bank, Newton’s hometown bank, offers these three things to know about agricultural loans.

1. There are various types of ag loans, and it’s important to understand which is best for your business.

Operating loans, equipment loans, livestock loans – how do you know what’s best?

Short-term loans have an amortization of one year or less and are typically used to finance for working capital, and include operating loans or lines of credit.

Intermediate loans have an amortization of 1 to 7 years and are typically used to finance equipment, livestock, or grain storage. Long-term loans have an amortization of 7 to 25 years, are used to finance farmland, dairy facilities, or ag related buildings. The useful life of the asset typically dictates the term and amortization of the ag loan.

2. Ag real estate loans typically require annual or semi-annual payments.

“The application process is similar for ag real estate loans and standard real estate loans, however, ag real estate loans typically require annual or semi-annual payments, said Adam Leber, senior vice president at FNNB Bank. “Standard real estate loans typically require monthly or semi-monthly payments.”

3. Ensure all proper paperwork is compiled before applying for a loan.

Before applying for an ag loan, an applicant would need tax returns for the past three years, a personal financial statement – including equipment list– and a crop or livestock budget for the current year.

Get the financing you need to help grow your agricultural business with help from FNNB Bank. An expert in agricultural lending, Adam Leber can answer your questions and discuss in detail your options.

FNNB Bank : 100 N. 2nd Ave. W., Newton, IA 50208 : 641.792.3010 :  www.fnnbbank.com