If the bank can not offer the type of loan needed, it may help to arrange a loan with another lender. The fact that a local bank may not be as knowledgeable about agriculture and its unique financial needs is an obvious disadvantage. They are important in terms of purchasing land. The seller of a piece of farmland, for instance, may finance the purchase. The buyer benefits by getting a low down payment and generally favorable repayment terms.
Individuals sometimes provide operating and start-up loans.
An example would be a relative lending you money to get started in an agricultural enterprise. The danger or disadvantage of this type of loan revolves around the financial knowledge and integrity of the person doing the lending. It is important to know the individual making the loan. You should also know the person's financial condition. For example, implement dealers may provide financing for large purchases while seed, fertilizer and other seasonal dealers may allow you to pay for goods on time.