Crop finance

Farming is big business in Nigeria – agriculture contributed with over 22% to GDP, employed over half a million people, and provided half the food we ate in 2021.

However, big business also means big expenses, and in an industry where margins are notoriously tight and seasonal cash flow problems persist, spending large sums on seed, pesticides, and crop storage can stretch farms to the limit. Fortunately, this is where crop finance can help – fast, affordable loans to meet working capital needs, or pay for large-scale investments such as grain silos and processors. Read on to discover more about this agricultural funding and to find the best crop finance for your farm.

What is crop finance?

Crop finance are loans that farmers can use to pay for the important tools and products they need to farm their arable land. The funding can pay for short-term costs, such as buying seed, pesticide and diesel fuel, or it can pay for investment costs such as plant, machinery and crop storage facilities. Depending on the type of loan and the purpose for which it is used, crop loans may be short-term, paid back in 1 – 7 years, or long-term, with repayment plans over 1 – 25 years. Some loans require no security (collateral), while some may require a charge over land, buildings, or other capital assets.

How does crop finance help generate revenue?

A cashflow squeeze can hamper a farmer’s ability to get the most out of their land, and to pay high, last-minute prices for essential materials. Additionally, lack of investment cash can limit the productive output of the farm. Crop finance can help farmers overcome these hurdles and increase their income:

  • Buy seed, pesticide, and diesel when it is cheap and in bulk to save on running costs.
  • Employ more seasonal workers to bring in harvests faster.
  • Cover transport costs to open new sales markets.
  • Pay for specialist help and analysis to get the most from your crops and invest in new types of product.
  • Upgrade and replace old, inefficient machinery to speed processing, loading and shipping times.
  • Invest in new vehicles to till, seed, and harvest more crops with less labour.
  • Expand silo and storage facilities to manage larger crop volumes.

How does it work?

Crop finance falls into two main categories:

Short-term farm loans to cover seasonal cashflow dips. Use them to pay for almost any farm expense – wages, fuel, seed, energy, etc. Pay the loan back over 1 -7 years. May be available with or without security.

  • Investment loans

Longer-term loans to pay for large-scale investments such as silos, plant and machinery. This funding will usually be provided as a commercial mortgage, development loan, or asset finance. In all cases, the asset works as security for the loan. Repay over 1 – 25 years depending on the type of loan.

How long can I finance crops for?

Depending on the type of loan, anywhere from 1 to 25 years.

How much will my repayments be?

Repayments will vary by type of loan, the sum borrowed and the borrower’s financial status. 

How to find the right crop finance for you

Crop finance sector is a niche lending sector, with different rules of application. Farmers seeking such a loan may find themselves forever searching and making applications to lender after lender. The delays this can create could cause you to lose important business and let your competitors get ahead. Instead, working with a broker, who can access crop finance from a wide range of lenders, is a better way to go. No more cold calls and endless demands for information. Simply indicate your funding needs, tell us about your farming plans, and leave the rest to us.

Get started with Swoop

Why plant one seed when you can plant many? Get the best rate, the best terms and the right crop finance for your needs. Get started today.


Written by

Chris Godfrey

Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.

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