What is more fundamental to American families than farm-fresh food on the tables? Yet this everyday function is so seemingly ordinary that few people actually sit down and think about all that goes into this laborious process. From the farmer to the workers, and from the seeds to the harvesting equipment, today’s farms are remarkable indeed. Most of us take for granted how we can buy produce grown in another part of the country in our local grocery store. But the reality is the process behind today’s farming is complex involving numerous entities seemingly working together.
How Complex Mandates Affect Farm Equipment Loans and Factoring
To make everything work like the well-oiled machine, farms require extensive financing. Yet farming is often a slim margin, seasonal business that traditional financing options generally won’t touch. Agriculture financing by factoring receivables is a way farmers can get the capital they need to harvest and ship their crops while meeting the legal mandates associated with the Perishable Agricultural Commodities Act (PACA).
The law, which was intended to protect suppliers and sellers of perishable agriculture products, makes farm loans and farm financing more complex. The new mandate requires extra hoops to jump through for those seeking agriculture financing by awarding priority lien status to suppliers so that their payment takes precedence over financing institutions. Though complicated, factoring companies are willing to work with those in agribusiness to help them get the capital they need to run and grow their business.
Agriculture Factoring Works As Fast as Harvest Time
Those in agribusiness know that expediency is key to success; few things are more important than the timely delivery of perishable produce. Failure to do so could result in big losses as no one will buy spoiled crops. Fortunately agriculture finance methods such as account receivable factoring are based on speed. With agriculture factoring, the setup process can take less than a few hours and in most cases you can have the money you need in a matter of days rather than weeks.