Obviously, unwise credit agreements can be deadly to any farm or business enterprise. It will help your chances and financing to understand the language and terms of the credit industry. This guide will help in that process. 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.