In response to farmers’ need for short–term cash and a restrictive regulatory environment imposed on traditional lenders, real estate investment trust, Farmland Partners Inc., has announced the launch of the FPI Loan Program – an agricultural lending product designed for farmers that will compliment Farmland Partners’ existing business model of acquiring and leasing farmland to operators.

 

Under the program, the company will originate fixed interest rate loans ranging from $500,000 to $5 million that will be secured by agricultural real estate, with a maturity of up to two years. The company will leverage its existing operations to meet borrower’s needs and underwrite loans quickly, while remaining within conservative loan-to-value parameters to ensure the protection of principal.

 

“American farmers are the most successful producers in the world, yet they often are short of capital to expand their businesses and weather commodity price volatility,” said Paul Pittman, chief executive officer of Farmland Partners. “The FPI Loan Program is another way we can help farmers succeed while giving our investors an attractive return.”

 

The company also announced the successful origination of its first loan under the program to a major Midwestern farm operator to provide working capital for the fall harvest. Secured by first mortgages on farm real estate at approximately 50% loan-to-value, the loan has a fixed annual interest rate of 8% plus points and fees, and is due in January 2016.