Agricultural Credit: Pros and Cons


Recently, banking organizations have been offering their customers new credit programs as well as credit products. One of the newest and most promising areas can be called loans for the development of agriculture, as well as own agriculture. Today, many banks can even boast their own loan programs. And, despite the fact that such credit products appeared relatively recently, they were able to occupy fairly stable positions in the financial market. The web-portal FinCor
analyst specifically explains everything about this.
Characteristics
The growing popularity of agricultural loans is nothing surprising. Over the years, agriculture has been an important part of our country's economy, responsible for its economic development and food security. That is why by issuing such loans, the state often also provides support to borrowers, who is trying to protect the rights and interests of farmers and often starts creating the most profitable loan programs.
How to get a loan for agriculture?
To obtain such a loan, the borrower must be the owner of his farm or agriculture, have liquid assets, permanent income, as well as all the necessary documents to do business. It is worth noting that for private owners, banks offer loan programs for a period of 5 years, and for owners of entire farms, for a period of 8 years. If a borrower of retirement age plans to obtain such a loan, he will need the participation of guarantors.
To obtain a loan from a bank, you must submit a business plan. A young entrepreneur needs to develop a business plan according to the following scheme:
curriculum (brief description of future activities, farms and objectives that the farmer seeks);
a detailed description of the economy (land area, infrastructure availability, communications, structures, equipment, rent or possession of these resources);
summary of financial and production indicators (employee's salary and number, planned number of manufactured and sold products, earnings);
financial section (sources of financing of the economy, expenses, plans for the development of the economy and its financial support, recovery of the investment, calculation of benefits);
risk analysis (risk forecast and a description of the measures to eliminate them).
Why do I need to prepare a business plan according to a certain scheme and address the event in a responsible way? Because it is a kind of business card of the future farmer: it is necessary to receive subsidies from the state when looking for investors and other sources of financing. If the profitability of the business exceeds the possible risks, and can be clearly seen in the business plan, the future farmer will be able to count on material support.