Ag & Farm Loans in Cedar Rapids & Eastern Iowa

In Eastern Iowa, farmers typically choose between three main types of financing:

• Operating Lines of Credit: Flexible revolving funds used for seasonal inputs (seed, fertilizer, fuel) and daily living costs.

• Livestock & Equipment Loans: Term financing for machinery, technology, and the purchase of breeding or feeder livestock.

• Agricultural Real Estate Loans: Long-term capital for purchasing tillable acreage, expanding farm borders, or refinancing existing land debt.

• Ag Construction Loans: Structured financing for building grain bins, machine sheds, or livestock facilities, featuring draw notes that convert to term loans.

• Government Program Participation Loans: Special financing leveraged through the FSA (Farm Service Agency) and IADA (Iowa Agricultural Development Authority) to provide rates and terms specifically for beginning or underserved farmers.

At Farmers State Bank, we also offer specialized livestock loans and building construction financing. Our local lenders in Marion and Cedar Rapids help producers determine the best structure based on their debt-to-asset ratio and cash flow cycles. 

To qualify as a beginning farmer, you typically need to have been operating a farm for 10 years or less and demonstrate sufficient education or experience in agriculture. Many Iowa producers leverage the IADD (Iowa Agricultural Development Division) Beginning Farmer Loan Program, which offers reduced interest rates. FSB works with new farmers to prepare the required three years of financial projections and tax returns needed to secure a competitive ag loan in the Cedar Rapids and Iowa City markets.

The primary difference is the source of the guarantee and the flexibility of terms. FSA (Farm Service Agency) loans are government-backed and often designed for producers who cannot obtain credit elsewhere, offering lower down payments. Conventional ag loans from a local bank like FSB typically offer faster closing times, less paperwork, and more personalized service. As an Iowa lender, we often provide "Guaranteed Loans," which combine the speed of a local bank with the security of an FSA guarantee.

Agricultural interest rates in Iowa are highly individualized and are not represented by a single "sticker price." Instead, rates are determined by three primary factors:

1. Benchmark Index: Most variable-rate loans are tied to the Prime Rate or SOFR, while fixed-rate ag mortgages often track the 5 or 10-year U.S. Treasury notes.

2. Asset Class: Rates differ based on the loan's purpose. For example, long-term Ag Real Estate loans typically carry different rates than short-term Equipment financing or annual Operating Lines.

3. Risk Profile: Your specific rate is influenced by your debt-to-asset ratio, credit history, and the projected yield of your operation.

At Farmers State Bank, we provide custom rate quotes to producers in Linn, Johnson, and surrounding counties. This ensures your interest expense is strategically aligned with your farm's cash flow and harvest cycles. Contact a local lender in Alburnett, Marion, Tiffin, or Cedar Rapids for today’s specific rates.

Yes. Modern agricultural financing can cover Precision Ag Technology, including GPS auto-steer systems, AI-driven soil sensors, and crop-monitoring drones. These investments are increasingly popular in Iowa for their ability to optimize input costs and increase yields. We offer equipment term loans specifically structured for these high-tech assets, often with repayment terms that match the technology’s expected lifecycle.