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:
profits from last year (66%)
loans from financial institutions (52%)
government programs (31%)
personal savings (31%)
credit cards (16%)
loans from family or other private individuals (14%)
shared ownership (6%)
operating leases (5%)
production contracts (5%)
other (11%)
The majority of farm respondents – 74% – net $40,000 or less annually from farming; 56% earned some off-farm income.
