One popular way to make money farming is with poultry. However, a poultry farm doesn’t come cheap. You need plenty of capital to get started. Luckily, the USDA makes it rather easy even for beginning farmers. Below are the steps you’ll go through to secure the financing you need.
Fix Your Credit
Before you do anything, make sure your credit is in good standing. If you don’t have a “good credit score,” find ways to fix it. Some of the most popular ways are:
- Bringing all accounts current
- Paying down outstanding debt as much as possible
- Avoiding opening any new accounts
- Avoiding closing any existing accounts
With a good credit standing, you’ll go further with USDA lenders offering a poultry farm loan. The next step is creating your business plan.
A Business Plan Puts it All in Perspective
You have to show lenders that you are ready and willing to start and operate your poultry farm. This means you have a plan in place. The lender can’t assume you know what you are doing. You must prove it. Your business plan should be as detailed as possible. It should include things like:
- Startup costs
- Operating costs
- Maintenance fees
- Supply fees
Your business plan should also obviously include how you plan to make a profit with your poultry business.
Show the Lender Various Bids
If you don’t have production facilities yet, you’ll need bids. You can then show these bids to the lender. The lender will take these bids into consideration when looking at your net worth and profit margin. Both factors play a role in your ability to secure a loan.
Just as you would have to do for a residential loan, you must show reliability in affording the payments. This can only be done by showing proper experience in poultry farming. The USDA does allow beginning farmers, but you must have some type of knowledge/experience in the industry. This way the lender believes that you have a chance to succeed in the industry.
The Rate and Terms of Poultry Financing
The USDA offers many options for poultry financing. You can usually choose between a fixed and adjustable rate for terms up to 15 years. If you need additional financing for the farmland itself, though, you’ll have to secure a Guaranteed or Direct Farm Loan from the USDA.
Both Guaranteed and Direct Loans provide flexible financing options for beginning farmers. Guaranteed farm loans come from your lender of choice. Direct loans come right from the USDA. Direct loans allow financing up to $300,000 and guaranteed loans allow financing up to $1,399,000.
Starting a poultry farm is costly, but the USDA makes it easier to afford. As long as you have all supporting documentation you can work with a USDA lender who can help lead the way. Once you get going, you may have other financing options at your disposal. The first step is getting started!