Question 1

Farm Credit vs. a private lender like Turnrow — which is right for me?

Accepted Answer

If you have clean tax returns and 60–90 days, Farm Credit wins — their long-term rates are subsidized by the cooperative system and Turnrow will not beat them. Private lending wins when you need to close in 2–4 weeks, cannot show two years of farm income, or hold title in a structure banks dislike.

Question 2

How does a bank ag loan compare to a private land loan?

Accepted Answer

A community bank ag loan typically offers lower rates and longer amortization but requires tax returns, global cash-flow analysis, and 45–75 days to close. A private loan like Turnrow's closes in 2–4 weeks on the asset alone — no tax returns, soft credit pull — at a higher rate for a 12–36 month term.

Question 3

Should I use an FSA loan or a private lender?

Accepted Answer

FSA direct farm ownership loans are the cheapest farmland money available — take one if you qualify and can wait. The costs are time (often 60 days to many months, and funding can run out mid-year), loan caps ($600,000 direct), eligibility rules, and paperwork. Private money is for when those constraints bind.

Question 4

What's the difference between hard money and asset-based private lending?

Accepted Answer

The mechanics overlap — both lend on the asset, fast, without tax returns. The differences are price, intent, and behavior at maturity. Classic hard money runs the highest rates with heavy points, often on distress. Asset-based private lenders like Turnrow price below hard money and underwrite the exit, not the foreclosure.

Question 5

Is seller financing better than taking a private loan?

Accepted Answer

If the seller offers reasonable terms, take it — seller financing can beat any lender: no appraisal, no closing timeline pressure, negotiable rate, and sometimes 10% down. Use a private loan when the seller wants cash, the offered terms are worse than market, or a short balloon leaves you with refinance risk anyway.

Question 6

What USDA and FSA programs exist for beginning farmers, and do they beat private financing?

Accepted Answer

For qualifying beginning farmers, nothing beats them. FSA's Down Payment Program finances 45% of a farm (up to $300,150) at roughly 1.5% for 20 years, direct ownership loans reach $600,000 below market rate, and microloans up to $50,000 carry minimal paperwork. A private lender cannot compete on price — only on eligibility and speed.

Question 7

Can I just use my operating line to buy land instead of getting a land loan?

Accepted Answer

Don't buy dirt with your operating line. An operating line is annual working capital for inputs, and burying a land purchase in it creates the classic ag failure mode: a 20-year asset on 12-month money. When the line cannot revolve clean at renewal, the bank calls it "carryover debt" and starts asking hard questions.

Question 8

Should I use a HELOC on my house instead of a loan on the land?

Accepted Answer

A HELOC is usually cheaper — home equity rates beat any land loan, and you may have the line already open. The cost is risk placement: you are pledging your family's home for a business land deal. Most HELOCs also cap out well below farm-purchase size, and business-purpose draws can complicate the picture.

Question 9

Should I buy with cash and refinance later, or finance the purchase up front?

Accepted Answer

If you have the cash, buying outright is the strongest play: cash offers win auctions and estate sales, often at a 5–10% discount, and you can pull equity back out afterward — "delayed financing." Finance up front only when writing the check would drain reserves you need for operations.

Question 10

Should I finance equipment through the dealer or borrow against my land?

Accepted Answer

For new equipment, take dealer financing — captive lenders like John Deere Financial run promotional rates, sometimes 0–3%, that no land-secured loan can touch, and the debt is non-recourse to your dirt. Land equity makes sense for used equipment, private-party purchases, or bundling several needs into one facility.

Question 11

How do crowdfunded farmland platforms compare to owning land outright?

Accepted Answer

They answer different questions. Platforms like AcreTrader or FarmTogether offer passive fractional exposure — $10,000–$25,000 minimums, professional management, zero work — with fees, illiquidity on the platform's timeline, and no control. Owning outright means control, leverage, direct tax treatment, and 1031 eligibility, at the cost of real work.

Question 12

Should I lease farmland or buy it?

Accepted Answer

As pure operating math, leasing usually wins: cash rent runs roughly 2.5–4% of land value annually, less than the interest on a purchase loan, and your capital stays free for equipment and inputs. Buying wins on control, improvement capture, appreciation, and never being outbid on ground you have farmed for a decade.

Question 13

How do I vet a private lender? What are the red flags?

Accepted Answer

Five red flags: large upfront fees before a written term sheet, no written terms at all, guaranteed approval with no appraisal or diligence, pressure to sign same-day, and default terms that read like the lender profits when you fail. A legitimate lender puts numbers in writing early and answers exit questions in specifics.

Question 14

When should I not borrow at all?

Accepted Answer

Don't borrow when the exit is hope instead of a plan, when the payment only works in your best crop year, or when you are borrowing to defend a mistake. Short-term money needs a defined exit — sale, refinance, or contracted income — visible on day one. No exit, no loan, from us or anyone.

Comparing Your Options