For any agribusiness, financial considerations boil down to striking when the irons are hot. When borrowing money, you want low interest rates and a good economy so you’re able to pay back your debts. Generally, if you wait too long, conditions change and become less favorable. If you’re planning on refinancing, then know that the time is now.

The Feds and Interest Rates

Since the Great Recession started in 2008 with the collapse of the housing market, the Federal Reserve (a.k.a., the Feds) have kept interest rates at rock-bottom levels to help spur on the economy. However, most factors indicate that the economy is now doing well. For instance, in December, the economy added more jobs than was expected.

In December, the Feds raised the interest rate for the first time in the last 10 years. This rate is used by all other lenders— banks, credit card providers, mortgage companies and lenders like AgAmerica Lending who refinance land loans— to set the rates they will offer businesses and consumers on loans and the like.

 

Why You Should Refinance Now

It’s a good time to refinance and lock in a low rate now, because most economists believe that the Feds will raise the interest rate again this year— multiple times, in fact. Economic forecasters are predicting the rate could be raised two to four more times in 2016 alone. Every time the Fed raises interest rates, the interest rates for loan products like credit cards, mortgages, car loans—and for those in the ag industry, cattle loans, farm ag loans and bridge financing loans— will increase. Right now, interest rates are still relatively low and the economy is healthy. In short, the financial irons are hot!

 

AgAmerica Lending has worked with agribusiness owners in just about every corner of the ag industry to help their operations to grow and thrive with our low interest rates, long amortizations, and outstanding 10-year line of credit.