Access to Funding is Vital for Sustainable Farming

The agriculture industry encompasses more than just farms and ranches. It also includes orchards and feedlots. Other companies are involved in the agriculture business supply chain, including grocers, diners and packaging and processing companies.

The agriculture sector provides and supports jobs for over 16 million individuals and creates $985 billion in sales, making it a vital player in the United States gross domestic product and job growth estimations. While the agriculture industry remains strong, there are some trends that threaten to disrupt traditional means of production.

Many of the traditional means of production utilized in agriculture production include the use of industrialized equipment to create processed meats, fruits and vegetables. In recent years, with the rising awareness of sustainability, consumers have increasingly demanded their products be harvested by more natural means. This includes the growth of local, organic foods and vegetables and the raising of grass-fed livestock.

Industry predictions are these demands will only grow greater until these practices become commonplace. While farmers have the ability to grow chemical-free produce and maintain free-reign livestock, these practices pose a threat to larger, industrialized agriculture businesses who have invested in equipment that poses risk to the environment. This situation is the opposite of what took place following the industrial revolution in the late 19th century and early 20th century, when large industry threatened the livelihood of small businesses operated by farmers and ranchers.

As the agriculture industry shifts its focus to sustainability, there is a growing need for business funding to adapt to new technologies. These expenses include new equipment and employees who are trained in the use of this new equipment. They can also utilize funds to market their business and their newly employed environmental practices.

Options for funding in the agriculture sector include the following:

  • Bank loans are an option for businesses that have consistent revenues and long term operations history.
  • SBA loans  make access to working capital a reality for farmers who are turned down for traditional bank loans. The SBA backs up to 85% of he loan, making lending attractive to financial institutions.
  • Alternative Lenders are more willing to work with businesses who don’t have enough credit history or profitability required by banks. 
  • Cash advances are on option for businesses with poor credit. A cash advance lender basically purchases a portion of future sales. 

Adapting to sustainable business practices will benefit agriculture businesses as well as consumers and the environment. It’s important that the agriculture industry be able to meet these new requirements while having access to vital technologies.

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