What is required to obtain a loan for agriculture

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Below we will tell you how to get a loan for agriculture, and about the types of agricultural loans. Recently, the attitude of the government of Ukraine to the situation in agriculture began to change for the better.

The result of urbanization was that there were few young, able-bodied people left in rural areas. Life in the village freezes. The state ignored this problem for a long time.

And now the government has decided to rectify the situation and return people to the village. Measures are being developed to encourage Russians to move to rural areas and work there.

This is also facilitated by the program on concessional lending to agriculture.

Types of agricultural or “rural” credit

To perform seasonal agricultural work or to meet the current needs of farmers a preferential agricultural loan outstanding for 2 years is offered.

Such a rural credit can be used for the purchase of seed material (only domestic), spare parts and materials for agricultural machinery, fuel and lubricants, fertilizers, livestock feed, and young domestic animals.

Another option for a rural business loan is an investment loan. It is issued only to beginning farmers.

Purpose of such a loan – this is the purchase of agricultural machinery (also only from Russian manufacturers), vehicles and elite livestock. It is issued for 3-5 years.

How to get a loan for (under) agriculture

Rural credit is granted exclusively to enterprises working in the relevant field, as well as to consumer cooperatives. Such institutions must necessarily have an administration building equipped with means of communication. The number of the team should not be less than 5 people, and 2 of them should have the status of legal entities.Mandatory condition – this is the availability of employees of such enterprises with an education corresponding to the activity profile. Naturally, loan recipients must be of working age.

If the company plans to receive an investment loan, then to him it is necessary to create a reserve fund that is at least 10% of the total fund of shareholders.

And the shareholders’ fund must be formed exclusively from their personal funds. The size of the fund cannot exceed the size of the cooperative’s net assets.

To apply for a loan, the representative of the enterprise must personally appear at the bank, where you will need to fill in the questionnaire developed by the bank. After that, it will be necessary to collect and submit to the bank a package of documents necessary for obtaining a loan.

The rural loan rate usually ranges from 14-17%. The size of the loan is agreed with the bank depending on the goals, minimum – 300 thousand hryvnias.

The bank may also require farmers to have a business plan. Therefore, it will be necessary to take care of its preparation in advance. The business plan must confirm that the enterprise will be profitable. Also, in order to successfully obtain a loan, you need to make sure that the company has its own funds. They should be at least a quarter of the cost of the entire project.

If we are talking about a large amount of agricultural credit, then the bank may require the transfer of real estate or equipment as collateral, as well as the presence of guarantors. It will be necessary to submit a request to the local administration and provide an extract from the business book.

must be taken into account, that the bank can limit the period of use of credit funds (usually 3 months). At its end, it will be necessary to provide the creditor with documents confirming the intended use of the funds.

See also our detailed material on that, as well as other articles of the section -.

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Category: credit or bank

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