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Unit 3: Managing the Farm/Ranch Business for Long-Term Success
Financing Options
Most small-scale, start-up and alternative farm businesses use a variety of sources to finance operating expenses, capital improvements and equipment purchases. In a 2003 credit survey conducted by the Land Stewardship Project of Minnesota, farmers reported using the following sources:
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profits from last year (66%)
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loans from financial institutions (52%)
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government programs (31%)
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personal savings (31%)
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credit cards (16%)
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loans from family or other private individuals (14%)
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shared ownership (6%)
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operating leases (5%)
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production contracts (5%)
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other (11%)
The majority of farm respondents – 74% – net $40,000 or less annually from farming; 56% earned some off-farm income.
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