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  • Writer's pictureKevin Pifer

Financing Farmland

Financing farmland is easier than you think. There are many parts to this equation. It all starts with a good relationship with your lender. Select a lender you trust and can work with for the long-term.

One of the more critical parts of this equation is the interest rate. Today, interest rates are relatively low compared to historical interest rates. The US Prime Rate is the interest rate at which banks loan customers funds for loans. This is a fair weather guide to what interest you will likely pay. Today the US Prime Rate is 4.75 percent. There are other methods that lenders use to establish their interest rates including their cost of Fed Funds, which is the cost lenders charge each other or trade with the Fed.

Regardless, strengthen your balance sheet to improve your net worth so that you will qualify for the best possible interest rate. Today’s interest rate environment favors the buyer compared to the 1980s when interest rates were in the high teens and in some cases over 20 percent! Call or email me for more information on lender preference and interest rate discussions. Tomorrow we will touch on more parts of this equation.


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