Meeting the Balance of Agricultural Financing
Agriculture loan guarantees
For better understanding of the agricultural loan guarantee is the best to start with an example: if one child get the loan amount reduced, the guarantors will make the same agreement for the full loan amount. Although loan guarantee isn't so cheap so here is where the agricultural financing takes action, by paying a part of the fee to the investiture bank.
Assets on balance sheet
The most important step in agricultural financing is providing a loan collateral from a lender. Here is an example so you can elucidate more clearly about the agricultural financing: if the loan collateral is about $100,000 and the request from the lender is $50,000, than the producer's role is very important. He may better chose the lender's $100,000 loan collateral than the additional $50,000. A good thing that should be integrated in the agricultural financing is to providing some financial counseling for the producers in order to make the perfect loan collateral.