A big industry with a long wait for payment
Agriculture is a significant part of California's economy, producing nearly $59.4 billion in revenue in 2023, and more than 400 commodity crops are grown in the state, including a significant portion of all fruits, vegetables and nuts in the United States. Production runs from the Central Valley to the Imperial Valley, the Central Coast, the Sacramento region and the north state.
The scale hides the situation of the individual grower. A farm spends heavily early in the year and gets paid once the crop is picked, packed and sold, sometimes through a packer or processor who pays on their own timeline.
The farm year as a cash calendar
- Pre-season. Seed or plants, soil prep, irrigation repair, equipment service and insurance.
- Growing. Water, fertilizer, pest control and crew labor, month after month, with no sales.
- Harvest. The costliest weeks: labor surges, fuel, bins, hauling and packing.
- Marketing. Sales to a packer, processor or buyer, often with payment weeks later.
- Post-season. Debts come due, equipment is maintained, and the next crop begins.
Where the squeeze is sharpest
Harvest tends to be the point where costs and timing collide. Crews must be paid weekly, while the buyer pays after delivery. A frost, a water shortage or a price drop can make a season come in below the plan, and fixed costs such as insurance, equipment payments and land costs do not shrink. Growers who sell directly, through farm stands, markets or restaurants, see faster cash but must fund packaging, transport and marketing themselves.
Uses growers fund
- A tractor, irrigation pump or sorting equipment that failed or needs replacing.
- Inputs bought ahead of planting to secure supply.
- Harvest labor and hauling costs before the buyer pays.
- Cold storage, packing space or a delivery vehicle.
- Bridging a delayed payment from a packer or processor.
Funding is a poor match for covering a crop that cannot cover its own costs. Run a simple per-acre budget before you borrow.
Questions to answer before borrowing against a season
- What is the budget per acre, and what price makes it break even?
- Is the buyer lined up, and what are their payment terms?
- How exposed is the crop to weather, water or pests, and what insurance is in place?
- Can you meet repayment if the harvest is 20 percent below plan?
Answer these on paper before you apply. They are the same questions any experienced farm lender or advisor would ask, and a grower who has the answers makes better decisions.
How to apply
Funding runs from $25,000 to $5,000,000. The review reads about three months of business bank statements, so mention where in the farm year those months fall. FICO 500 and above is considered, the pull is soft and no tax returns are required. Sole proprietors can apply, which covers many family farms, and funding can arrive in as little as 24 hours. Start the application.