Oilseed (except Soybean) Farming

111120

TD Bank, National Association (DE)

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Average SBA Loan Rate over Prime (Prime is 7%): 3.12

7a General

Builders Line of Credit (CAPLine)

Change of Ownership

Newtek Bank, National Association (FL)

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Average SBA Loan Rate over Prime (Prime is 7%): 3.52

Change of Ownership

Existing or more than 2 years old

Loan Funds will Open Business

SBA Loans for Oilseed (except Soybean) Farming

Introduction

Oilseed farming, excluding soybeans, includes crops such as canola, sunflower, flaxseed, safflower, mustard seed, and other specialty oilseeds. These crops are essential for producing edible oils, biofuels, livestock feed, and industrial products. However, oilseed farmers face unique challenges, including volatile commodity prices, weather risks, and high input costs. Traditional lenders often hesitate to finance small and mid-sized farms due to the unpredictability of agriculture.

SBA Loans for Oilseed (except Soybean) Farming provide accessible, flexible financing options that allow farmers to invest in equipment, purchase farmland, stabilize cash flow, and withstand seasonal challenges. With government-backed guarantees, SBA loans help reduce lender risk and expand access to capital for agricultural producers.

Industry Overview: NAICS 111120

NAICS 111120 covers farms primarily engaged in growing oilseed crops other than soybeans. These include canola, sunflower, safflower, flaxseed, and mustard seed, which are processed into edible oils, biodiesel, meal, and specialty products. Demand is driven by both the food industry and renewable energy markets, making this a strategically important agricultural sector.

Despite steady demand, oilseed farmers face challenges from fluctuating global prices, competition from imports, and the impact of climate change on yields. Reliable financing is crucial to manage these risks and invest in farm productivity.

Key Financing Challenges for Oilseed Farmers

Based on insights from agricultural forums, farmer associations, and small business discussions, common financial hurdles include:

Volatile Commodity Prices – Prices for canola, sunflower, and other oilseeds fluctuate with global markets, creating uncertain revenues.
High Input Costs – Seeds, fertilizers, fuel, and pesticides represent major upfront expenses each season.
Equipment Investments – Tractors, harvesters, irrigation, and storage facilities require large capital outlays.
Weather and Climate Risks – Droughts, floods, and extreme weather can devastate yields and profitability.
Limited Financing Access – Many banks consider farming high-risk due to seasonality and dependence on global markets.

How SBA Loans Support Oilseed Farming

SBA loan programs provide affordable financing solutions that help oilseed farmers manage risks and grow sustainably:

SBA 7(a) Loan

Best for: Working capital, refinancing, equipment purchases, and operating expenses.
Loan size: Up to $5 million.
Why it helps: Provides liquidity for input costs, payroll, or upgrading farm equipment.

SBA 504 Loan

Best for: Real estate and large equipment investments.
Loan size: Up to $5.5 million.
Why it helps: Ideal for purchasing farmland, building storage facilities, or installing irrigation systems.

SBA Microloans

Best for: Small farms or specialty oilseed producers.
Loan size: Up to $50,000.
Why it helps: Useful for purchasing seeds, covering marketing expenses, or buying smaller equipment.

SBA Disaster Loans

Best for: Farms impacted by natural disasters.
Loan size: Up to $2 million.
Why it helps: Provides recovery funding after floods, droughts, or storms.

Step-by-Step Guide to Securing an SBA Loan

Check Eligibility – Must be a U.S.-based, legally operating small farm with good credit (typically 650–680+).
Prepare Documentation – Tax returns, yield history, equipment quotes, and cash flow projections.
Select an SBA-Approved Lender – Work with lenders familiar with agricultural lending.
Submit Application – Provide a strong business plan showing how funds will improve productivity and stability.
Approval Process – SBA guarantees reduce lender risk; approval generally takes 30–90 days.

FAQ: SBA Loans for Oilseed (except Soybean) Farming

Q: Can SBA loans be used to buy farmland for oilseed crops?

Yes. SBA 504 loans are ideal for purchasing or expanding farmland dedicated to oilseed production.

Q: Can SBA loans fund equipment like harvesters and irrigation systems?

Absolutely. Both SBA 7(a) and 504 loans can finance tractors, harvesters, irrigation, and storage facilities.

Q: How much down payment is required?

Most SBA loans require 10–20% down, which is more affordable than traditional farm loans.

Q: Can SBA loans help cover seasonal operating expenses?

Yes. SBA 7(a) loans are well-suited for covering input costs like seeds, fertilizer, and fuel during the growing season.

Q: What repayment terms are available?

Working capital: Up to 7 years
Equipment: Up to 10 years
Farmland/real estate: Up to 25 years

Q: Are new oilseed farms eligible for SBA loans?

Yes, but startups typically need a strong business plan, collateral, and agricultural experience to qualify.

Final Thoughts

The oilseed farming industry, excluding soybeans, is a critical part of U.S. agriculture, supporting both food and renewable energy markets. However, farmers face significant financial hurdles, from volatile prices to weather-related risks. SBA Loans for Oilseed (except Soybean) Farming provide affordable, flexible funding to help producers invest in equipment, expand farmland, and manage cash flow.

Whether you’re growing canola, sunflower, safflower, or other oilseeds, SBA financing can give you the capital support needed to succeed in a competitive and unpredictable market. Connect with an SBA-approved lender today to explore your options.

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