Small Business Farmers are Seeking Larger Loans on Average and Loans for Operating Expenses
April 22, 2024
Delaney Sexton
Contributing Editor
Farms are Seeking Larger Loans on Average and Loans for Operating Expenses
For the first time since 2022, loan volumes increased substantially, but the average loan volume in the first quarter of 2024 is still below the average loan volume in the last decade. Due to loan sizes being larger, it has balanced out the smaller number of loans during the first quarter of 2024. Operating loans drove the increase in farm lending activity.
There has been a recent trend in new non-real estate agriculture lending having larger average loan sizes. They found that about half of all lending activity during the first quarter of 2024 was attributed to loans larger than $500,000, a consistent trend since 2022.
Lending activity to farms increased as interest rates became more consistent. The survey found that the average interest rate on all types of farm loans was relatively unchanged from the last quarter. Throughout 2023, interest rates increased rapidly, so this is a welcome stabilization.