Differences Between Farm and AG Loans

At Farm Mortgage Loan, we’re thrilled to be a top resource when it comes to securing all types of farm loans for you and your family. Whether it’s to buy new land, build new facilities, or improve some part of your system’s efficiency, we have loans that can help.

While they’re generally for the same kinds of people, many don’t realize that our farm loans and agricultural land loans (or AG loans) are very different things in reality. What are the important differences here, and when should you be favoring one over another? Let’s take a quick look.

Farm Loans

Farm loans are a generally broad category that includes a few different things. They’re usually paid out over a period of 25 to 30 years, and will be taken out to help with any purchasing or refinancing of agricultural producing property. They can also include things like operating costs for areas like seed purchase, fertilizer restocking, or anything that the farm business needs to establish a growing crop.

In addition, farm loans will cover all payments toward machinery required as part of farming operation. They can also be used to pay living expenses during the period before a given crop has been harvested.

Agricultural Land Loans

Agricultural land loans, on the other hand, are reserved only for the purchase of real estate that will specifically be used to produce farm products. AG loans are also used to refinance long-term loans. They are required to only come on properties that produces agricultural products – just because you have a property with large acreage doesn’t mean you can get an AG loan unless you actually have crops growing on the land as well. Rates for AG loans are usually competitive with other commercial loans.

For more on the differences between important types of farm loans, or to learn about any of our services or offerings, speak to the pros at Farm Mortgage Loan today.

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