Running a farm – regardless of its production profile – is associated with daily, hard work, often dependent on unpredictable, sometimes capricious weather conditions. It often happens that the arduous work of a farmer and his family is ruined by a weather cataclysm, taking away within a few hours the effects of weeks or even months of trouble. The number of pigs or cattle can be decimated by disease, and the damage will not be covered by occasional state aid. Finally, a farmer can never be sure that the prices offered to him for buying his crops or slaughter meat will cover the costs incurred to produce them and, of course, will bring satisfactory profits. In this situation, any, even the slightest stumble – sudden expense, unforeseen equipment repair or unplanned, but necessary visit to the doctor – can cause disruption of financial liquidity. However, it is not only natural disasters that cause agri-food holdings to lack money. It often turns out that farmers face a lack of funds for current agricultural production. This trend is particularly noted for farms where the main source of income is seasonal crops. In such cases, the lack of money is especially noticeable during early field work. Then the funds are very depleted, and sometimes even a lack of them is noted. In turn, the expenses associated with the resumption of field work are significant. Added to this is the proper preparation of machines and all types of equipment after a period of downtime.
A farmer’s loan . How can you apply for it?
Fortunately, the banking services market offers many solutions that help keep your household and household budget at the right, safe level. In order to meet farmers, banks are also trying to simplify all lending procedures. All this is to facilitate access to banking products, and above all to accelerate the payment of funds from the loan. Only in this way can they meet the requirements of agri-food sector customers, whose needs are often sudden but also necessary for the farm to function. In this and many other situations, traditional cash loans for farmers for any purpose (including consolidation loans) come to the aid, which will allow to finance all surprising expenses, cover current expenses – both related to agri-food production and running a farm home. A similar solution available in non-bank loan companies is also a farmer loan , which is characterized by a much smaller amount of formalities and usually a more favorable calculation of creditworthiness. However, it should be remembered that, therefore, a loan for a farmer will usually be a more expensive solution than loans for farmers. Parabanks compensate for this liberal approach to clients’ financial capabilities by means of higher interest rates and the so-called preparation fees.
Drought loan and agricultural loan for the purchase of fixed assets. What is who can apply for it?
Another solution that should interest every farmer is agricultural loan for the purchase of fixed assets and investments. It is worth taking a closer look because it is a very useful solution. This loan was adapted to the specific needs of farmers who have to deal with the unpredictability of the weather and the changing situation on national and international markets. A drought loan , also called a disaster loan , is a solution whose assumptions will go to anyone living on a role: it is a loan intended to cover losses incurred in farms as a result of drought, which increasingly affect our country and turn it into ruin hard, many months of work. This type of financing is available to those farmers who have suffered losses in agricultural production as a result of adverse weather conditions. The dried loan is co-financed by the Agriculture Development and Modernization Agency and requires appropriate procedures.
What can you use the credit for farmers for?
Credit for farmers for any purpose is not only the opportunity to repair the budget in the event of a weather disaster, unfavorable prices in purchases or slaughterhouses, and a way to deal with sudden family expenses. Funds obtained in this way can also be used for the development of the farm itself – the purchase of machinery and their modernization and repair, the purchase of fertilizers and plant protection products, feed and seed, the purchase of inventory, the purchase or lease of land, and the construction or renovation of farm buildings. As it is a loan for any purpose , we are only limited by imagination – because no one will check how the allocated funds have been used.
How is the farmer’s creditworthiness calculated?
Creditworthiness in most cases is calculated on the basis of all income obtained by the farm – invoices, payments and so-called hectare / conversion unit (i.e. a calculation unit established mainly for agricultural tax purposes; based on the actual arable land area: arable land, meadows, pastures, orchards, lands under ponds and buildings, wooded or shrubland lands for agricultural land). Many institutions also take into account the forecast profit or cultivation forecasts. Let us add that it does not matter whether the farm is run alone or together with other co-owners. To issue a credit decision, you only need to show your ID card, a decision from the Commune Office about the amount of agricultural tax and a decision to assign a tax identification number (NIP). In order for the farmer’s loan to be launched, a certificate of tax arrears and KRUS contributions are needed (such certificate may not be issued more than one month before submitting the loan application). However, with larger loan amounts and a longer repayment period, the bank may require more documents – e.g. confirmation of income obtained from running a farm (they can be obtained at the relevant commune office). If the bank counts EU subsidies for the assessment of creditworthiness , you will also need to confirm their amount. This certificate can be obtained from the Poviat Agency for Restructuring and Modernization of Agriculture.