Cattle Farm And Ranch Loan – Understanding Your Options
Did you know that cattle and beef farmers in the United States raise 7% of the world’s cattle, making up 20% of the international beef supply?
Cattle ranching makes up more than a million jobs all over the nation. 75% of wildlife lives on ranch land. No wonder Americans want to become ranch owners or find their way into cattle farming.
Even though this process can be expensive, you can get a cattle ranch loan to help you set up. This loan allows farmers in the beef market to run their businesses, get ranch ownership, or expand their operations how they see fit.
A cattle farm and ranch loan mainly allows individuals to:
- Buy a cattle ranch business.
- Expand their cattle ranch business that has been around for centuries.
Back in the day, ranchers would be forced to wait several months before their loans were approved. However, today, business owners can benefit from the new lending structure, which allows them to open an account in less than 48 hours!
This is great for those who want to buy land, livestock, equipment, or working capital to make an honest living from animals and land. It doesn’t matter if you are a first-time buyer or want to expand your existing farm; a ranch loan covers both.
Should You Get a Cattle Ranch Loan?
Be truthful about your financial situation and take an overview of where you stand before applying for the loan.
This involved looking at your budget for the ranch and accounting for income, expenses, creditors, debtors, and tax statements. Knowing your finances will give you the confidence to seek a ranch loan that’s right for your needs.
This also gives you credibility and peace of mind that you have the tools and talents to achieve your goals for your land. Securing suitable farm credit also empowers you to find the right partners who’d be more than willing to work with you.
Moreover, if you see yourself in any of the following scenarios, you should get a cattle and farm ranch loan:
- You own a ranch but do not have the required capital that will help you expand.
- You own a ranch but need a short-term investment because your funds have run out unexpectedly.
- You want to purchase a cattle farm and ranch but are short on the capital needed to cover the utilities, feed, and veterinary care.
- You want a cattle ranch but do not have enough resources to buy equipment, building materials, land, and cattle.
If you dream of owning a cattle farm and ranch, and the only thing holding you back is the finances needed, a cattle farm and ranch loan is perfect for helping you kick-start your career. 30% of businesses fail in the US because entrepreneurs fall short of capital. If only these businesses could source finance, all their worries would disappear. Do not hesitate to take out a loan.
If you own a ranch or dream of owning one, a cattle farm and ranch loan is the way to go.
How a Cattle Farm and Ranch Loan Can Help You
Combat Market and Season Changes
When running a cattle farm or ranch, be flexible, especially when dealing with market and seasonal fluctuations.
You cannot predict when the weather will be wetter or drier than usual or when there will be alterations in market trends, causing a rancher to alter his financial planning.
With the help of a cattle farm and ranch loan, you can deal with any unexpected event without worrying about your farm shutting down or running out of resources.
Purchase Equipment or Repair Buildings
The agriculture business is always thriving, and equipment and buildings can start to deteriorate with use. If storms hit your area, you might be left with several repairs that, if not paid attention to, could impact your livestock and their health.
If you require financial help in repairing fences, stables, or sheds, a loan can help you through.
Hold Onto New Opportunities
Ranch owners need to be open to opportunities that will help them increase their profit margins. As a ranch owner, you can allow the public to access your agricultural lands for hunting, fishing, and touring purposes.
If you want to build a ranch business where you benefit from higher profit margins but find yourself short of the resources to do so, a ranch loan can help you.
Buy or Maintain Livestock
You can never predict when the regulations around livestock will change. New medical treatment or vaccination schedules may be announced with the aim of improving housing or feed quality. Moreover, weather conditions like storms, rains, and droughts can drain your savings quickly.
If you want to buy store stock, get more herd, or adapt to the government-introduced changes but lack the capital to do so, take out a cattle farm and ranch loan so your business is not affected.
Different Types of Cattle Farm and Ranch Loans
Let’s say you have the land to raise livestock and all the equipment needed to ensure a profitable ranch. However, you must also have enough cattle, poultry stock, and catfish to get things running.
If you find yourself falling short on investment, don’t worry; there are several cattle and farm loans you can turn to:
- You can get a cow-calf loan on a term basis that does not exceed five years.
- These loans can be financed via an operating loan that will be matured each year.
- Collateral will be the cattle, including the calf production.
- Sales from the livestock collateral will go toward repayment plans.
Feeder Livestock Loans
- These loans can help you purchase or feed existing livestock.
- The first lien on the stock will be the primary collateral.
- You will have to repay the loan through the sale of your livestock.
Stocker Cattle Loans
- These loans can be used to buy cattle for seasonal grazing. You can also use the money for operational expenses that come with the pasturing of cattle.
- They finance approximately 80% of cattle costs.
- Repayment plans will be made around the sale of the cattle.
How to Judge Your Collateral Value
Collateral value is essential as it helps lenders trust you and ensure you can service a loan. Your collateral can include the value of your livestock, equipment, real estate, or any asset you own.
When you ask for a loan, lenders will note your net worth. An individual’s net worth is dependent on his assets and liabilities. One’s financial statement can usually judge these. It gives lenders a gateway into your holdings as they understand your business’s stability.
Why Assessing Your Cash Flow Before Taking Out a Cattle Farm and Ranch Loan is Important
Before you take out a cattle farm and ranch loan, you must pay attention to your cash flow. This is the amount that you predict your cattle ranch will earn. Moreover, it takes into account your loan payments and expenses.
The predicted earnings of the business mainly categorize the cash flow during the loan period. It helps lenders predict the amount of money your ranch should be given to borrow. After all, no lender will loan a business more money than it can manage to lend back. Hence, you must understand your cash flow before applying for a loan.
A cattle farm and ranch loan should help you achieve your business goals without feeling like you are under too much financial pressure.
Applying for a Cattle Farm and Ranch Loan
There are three main steps that you need to pay attention to when applying for a cattle farm and ranch loan:
Organize Your Financial Documents
If you are keen on qualifying for a cattle farm and ranch loan, you must show your lender that you will be able to pay back the loan. The first step is getting all your financial documents in order. This includes your credit and personal assets.
Before considering you for a loan, your lender will try to gauge how responsible and organized you are. After all, no lender wants to be stuck with a flaky individual who does not pay back his loans in a timely matter.
Communicate Your Business Goals
Before applying for a loan, you must know your long-term business and financial goals. What do you dream of? Do you want a small or big ranching operation? How much cash flow do you estimate your business will bring in during the first five years? How many years will it take for you to repay the loan as well as the interest?
All these are crucial questions you must consider before asking for a loan. You can also speak to a financial advisor who can help set your expectations straight to help you set realistic goals for yourself and your business.
Whether you are a first-time buyer or a lifelong rancher, a ranch loan can make life a lot easier for you. And if you have papers in order, approval can happen in a few days!
Here’s what you need to do:
Fill in the Loan Application. Once you have organized your financial history and have a clear idea of what your future business plans look like, all you need to do is fill out a loan application.
This means getting in touch with a reputable lender who will help you sign up for a loan and form a loan repayment plan that suits your interests without burdening you too much.
Why United Farm Mortgage is Perfect for Your Financial Needs
Do you want to bring your cattle farm and ranch business to life and see it prosper? In that case, you need to get in touch with a reliable lender who understands your business goals, accepts your cash flow, and creates a realistic repayment plan without making you feel like you are drowning in debt.
United Farm Mortgage is America’s leading agricultural lender. We provide loans to farmers in need, especially those who have big dreams for their businesses but lack the investment to bring their dreams to life.
For 35 years, we have helped rural communities and farmers quickly access agricultural loans. We allow our clients to communicate their expectations, needs, and goals with us so that we can set realistic plans for them that will enable them to build their own cattle farms.
We aim to help you in any way needed to make running your cattle farm easier. After all, farming and ranching are hard work, and we respect our clients’ dreams.
Managing a ranch without external help is a considerable burden during economic upheavals and inclement weather. At United Farm Mortgage, we take responsibility for you with cattle farm loans that are easy to access and easier to manage. The best part is that there are no prepayment penalties, and we have the lowest interest rates in the state.
At United Farm Mortgage, we believe in our clients and try our best to help their dreams become a reality.