The beginning note worthy step that may foreshadow what’s forthcoming with interest rates happened during the Federal Reserve’s meeting on February 18th, 2010. The Central Bank on Thursday raised the interest rate that banks pay to borrow money during emergencies from .50% to .75%. Although this rate increase was highly anticipated the Central Bank had went out of the way the mention that it does not anticipate to raise the federal funds rate which influences consumer loans (including farm loans) for an extended period.

So what does this mean for Farmers and Ranchers obtaining a new farm loan?

The simple answer is nothing in the short term. The hike is an indication that the Federal Reserve Banks is starting to withdraw some of the efforts it has made during the recession. Although the economy is far from a rebound some growth has made way for the decision in the increase. This increase should have little impact on interest rates for current new loans but may foreshadow future events.

For a farmer obtaining a new farm loan or refinancing an existing farm loan it is by far the best opportunity in years to take advantage of near historically low farm loan rates. With some small signs of economic stability and the indication the Federal Reserve is beginning the process of rate movement in the other direction. Farmers, Ranchers, and Producers should seriously take a look at their current finances and look to the possibility of refinancing an existing farm loan.
The right loan terms are important for any operation. Farm Plus Financial offers farm loans and ranch loans with flexible terms including fixed and variable rate products to fit the needs of any operation. Our variable rate farm loan products have a built in conversion option, also referred to as a safety net, which gives the customer the ability to convert a variable farm loan to a fixed loan by simply calling and requesting the conversion. The conversion option allows you to take advantage of historical low interest rates while giving you the ability to convert into a fixed rate when the Federal Reserve Bank begins the process of raising key interest rates.

To learn more about loan programs call toll free 866-929-5585 or click here to get started. Our farm loan specialists will be available to review your cash flow needs and will assist you in financial planning for your farm loan and ranch loan needs.