They are usually for a year or less, to be paid off with the income from that year's production. Security is likely to be a lien on the products produced or items purchased. Open account credit with the supplier is another source of short-term financing. Working capital loans are for longer term assets, such as machinery, breeding stock, building renovations and additions. Lenders may call these intermediate-term loans, and they are often for five to seven years.
Security is usually a mortgage on the personal property financed.
Long-term loans are usually for funding of land and buildings. Farmers often use them for major real estate improvements and to consolidate other loans. Security is usually a lien on the real estate of the operation. The activity and availability of the lenders interested in agriculture loans varies substantially in Missouri. For this reason, and because their programs are constantly changing, the following will be more of a directory than a description.