1Realize that there are no magic shortcuts. Each applicants situation is unique to that individual farm operation so there are no magic tricks that can help every application get approved. It is important to realize that the bank is making an investment into your farm operation, so it is crucial to put your best foot forward. While there are many factors that are only able to be influenced by the market or or long term strategic moves by your farm business, here are some of the factors that can be influenced to improve your chances of getting approved for a farm loan.
2Consider your credit report. Prior to having your credit report pulled by your farm lender it is beneficial to pay down credit cards and any other miscellaneous debt as much as possible.
Credit card companies typically report the current balance to the credit agencies at the end of the month, so paying your debt down around the 25th of the month prior to the credit pull will result in a potentially improved score along with lower debt obligations that will benefit your debt to income ratio.
3Use income tax panning strategies. They can maximize the income that can be used for farm credit approval. For example, depreciation is an expense that will be added back to income by many farm lenders. It maybe possible to add depreciation back to income, since it is a non-cash expense. For other tax planning strategies, contact your current lenders office.
4Get a good appraisal. The agricultural appraisal is commonly the final stage of the loan approval process. Selecting the correct appraiser can result in a more accurate property value and possibly a higher property value. Appraisers that are well informed with the current market conditions and recent agricultural property sales in your area do not need to be conservative because they are able to be accurate.
Make sure to hire an approved agricultural appraiser recommended by the farm lender you are seeking a loan from.
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