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Factors That Impact Your Farm Loan Approval

When you apply for a farm loan, you want to make sure your chances of approval are as high as possible. Every piece of information you gather, every question you answer, and every document you submit works together to create a strong application that can connect you to the best loan option possible.

At the end of the day, approval is up to your lender. However, there are a few considerations you can focus on to help improve your chances and determine the likelihood of getting the loan you want. Explore some of the main factors that impact your farm loan approval.

Credit History

Credit score and credit history play a crucial role in any loan application, and agriculture loans are no exception. Your credit is an easy way for potential lenders to assess the likelihood that you can and will pay them back. Think of it like a professional recommendation or a resume of past experience for your bank account.

Lenders will have a minimum credit score requirement that you must meet. At Farm Plus Financial, all borrowers must have a minimum credit score of 660. However, exceeding that requirement with a higher credit score can land you better interest rates and different loan options.

Current Income

Your income influences your ability to pay off your debt. The greater your farm’s income, the easier it is to stay on top of payments and the more likely you are to repay the loan on time.

This is why it’s important to draft out your farm’s annual income—or, if you’re just starting out, your projected income. The more information you can give your potential lender about assets, revenue, and profits, the easier it is to prove you’ll have enough income to pay on time.

Farming Experience

Work history, education, and other similar factors also impact your farm loan approval. After all, someone with experience in the industry knows more about what they’re doing and has a better chance of finding success when they’re first starting out.

But farm work isn’t the only relevant source of experience. Even if you haven’t worked in the agriculture industry before, you might have relevant experience and knowledge from other jobs. Skills such as problem solving, creativity, adaptability, and more help you rise to challenges and find success on your farm. Applying your work experience to your goals and interests as a farm owner shows that you have the knowledge and determination to work hard and find success with your farm loan.

The experts at Farm Plus Financial are here to help you obtain the financing you need to make your farm business a success. Learn more about the approval process for our farm real estate loans when you visit us and start your online application today.