Where can you get a farm loan?
Farm borrowers generally choose among a few types of lenders. Commercial banks and credit unions lend to farms in many communities. The Farm Credit System is a network of borrower-owned lending cooperatives, overseen by the Farm Credit Administration. USDA's Farm Service Agency offers direct loans and also guarantees loans made by commercial lenders. Equipment dealers and input suppliers may offer financing as well.
Each has its own strengths. Local lenders often know the area and the farm economy well. Some lenders specialize in agriculture, and others lend to many kinds of business. The right fit depends on your size, your crop or livestock type and your stage in farming.
Specialty and beginning-farmer programs also exist at some lenders, so mention your situation. Extension offices and farm organizations often know which local lenders work well with new or small operations.
How do you prepare before you ask for quotes?
Get your own numbers in order first. A lender will ask for similar paperwork whether you are looking at one bank or five, so gather it once. Know how much you need, what it is for, and how you will repay it.
Write a short summary of the request: purpose, amount, term wanted, collateral you can offer, and the income that will repay it. A clear request makes it easier for lenders to compare apples with apples.
Keep a simple comparison sheet with a column for each lender. Record the rate, fees, term, collateral, contact name and date of the quote.
- Recent tax returns and farm financial statements
- A current balance sheet and a cash flow projection
- A list of debts, balances and payments
- Production history and a plan for the coming year
- Personal financial information for owners and guarantors
How do you compare offers fairly?
Ask each lender for a written estimate with the same amount and term. Line up the rate, fees, payment schedule, collateral requirements, covenants, and any account requirements. Pay attention to the total cost over the loan, not just the monthly or annual payment.
Look beyond price too. Ask about service: who will your loan officer be, how quickly do they decide, and do they understand your type of farming? A lender who knows your operation can be flexible when conditions change.
What should you ask each lender?
The best questions reveal how a lender works with farms when things do not go as planned.
Bring your preliminary questions about FSA guarantees to the first conversation. A lender that is not approved for the program will say so, and you can move on.
- What do you need to see to approve this loan?
- What collateral do you require and what is your loan-to-value policy?
- Are there fees at closing or each year?
- What are your reporting requirements during the loan?
- How do you handle a late payment or a bad crop year?
- Do you work with FSA guarantee programs?
Should you consider FSA programs?
FSA's guaranteed loan page explains that approved commercial lenders make and service the loan while FSA guarantees a portion of any loss. A local FSA Farm Loan Team can help you find participating lenders. Direct FSA loans are another option, and the application goes through your local office.
These programs have eligibility rules and processing steps, and the terms change. Ask your local FSA office what applies to your situation before you assume you do or do not qualify.
Decision timelines differ. A guarantee or direct loan adds review time, so apply well ahead of when you need the money.
What mistakes should you avoid when shopping?
Do not let applications pile up at many lenders without a plan, since too many credit inquiries can matter to your credit file. Pick a few well-matched lenders instead. Do not accept a verbal promise: get terms in writing. And do not skip the fine print on covenants and fees.
Finally, beware of anyone who guarantees approval or asks for an upfront fee to find you a loan or grant. Legitimate lenders and USDA offices do not do that, and the CFPB has consumer guidance on avoiding loan scams.
Key takeaways
- Compare several lender types: banks, credit unions, Farm Credit lenders and FSA programs.
- Prepare one complete package and a clear written request.
- Compare written quotes on total cost, covenants and service.
- Ask your local FSA office whether a guarantee or direct loan could apply.
- Be wary of upfront fees and guaranteed approval claims.
Sources and official links
Last reviewed: November 12, 2026. Written by the Farm Money & Grants Editorial Team. Educational only, not tax, legal or financial advice. See our editorial policy.