Business Guidance

Keeping Communities Strong: How Next Generation Farmers Can Grow Their Business

For next generation farmers, starting new farming operations or growing the family farm can come with multiple financial challenges. Most equipment and livestock purchases or land acquisitions require large sums of money to complete. Therefore, working with a team of agricultural lending professionals to finance growth and transitions can provide families with the security they need to carry on their farming tradition.

Finding a lender that understands the unique needs of farmers is especially important in areas like Lancaster County, Pa., where the total value of all crops produced exceeds $1 billion annually and 12% of the total county workforce participates in farming occupations.

Farmers who hope to continue the family legacy – next generation farmers – should carefully research what types of funding they might need while considering these three key ways agricultural lending can help:

  1. Farm and land acquisitions. One way first-time farm buyers can utilize agricultural loans to continue farming traditions is for farm and land acquisitions. For example, The Next Generation Farmer Loan Program is offered by the Pennsylvania Department of Agriculture to help first-time farm buyers get their feet on the ground. Through this program, the state waives income tax on loan interest money, meaning the lender is able to provide new farmers with lower interest rates on their loans. Farmers can utilize this program for loans up to $544,000 – if they require additional funding, regular loans can be obtained for amounts above $544,000.
  2. Building construction. For many new farmers, the first big purchase isn’t a land or farm acquisition. Rather, they buy equipment and livestock to increase production or build new chicken houses or dairy barns to grow the family farm. In many cases, lenders can partner with Farm Services Agency administered through the USDA to offer startup money to farmers who haven’t built up the credit they would normally need to secure large loans. Thanks to this option, they are often able to build facilities that expand the capabilities of their farms.
  3. Equipment and livestock purchases. When it comes time to buy additional livestock and equipment, one helpful option available to farmers is utilizing a revolving line of credit. If farmers need quick access to funds in order to make a purchase, they can pull from this line of credit and then pay the money back the following month after they receive payment for their products.

For young farmers hoping to start their own farm or continue an established family farm, it’s important to have a strong grasp of intended improvements and business growth plans before making significant financial decisions like taking out loans. At Univest, roughly 90-95% of Next Generation Loans in the Lancaster region are for second, third and even fourth generation farmers who want to continue their family traditions.

Are you interested in learning more about how agricultural lending can support your family’s farming legacy? The agricultural lending team at Univest is available to help. Contact us to start a conversation.


Univest Bank and Trust Co. is Member FDIC and an Equal Opportunity Lender