Farms and financing–that’s a common combination in agriculture. Because farm operators often use financing arrangements to fund the capital-intensive nature of farming, we created the Financing the Farm law bulletin series. The series aims to help operators, especially new and beginning farmers, understand the legal workings of farm financing arrangements.
We’ve just added two new bulletins to the Financing the Farm series. “Personal Guarantees and Agricultural Loans” address the legalities of a personal guarantee–a personal promise made by a third party to pay the loan if the borrower fails to do so. We explain when lenders might require a personal guarantee for a loan, how a personal guarantee works, and issues and implications for entering into this type of agreement. Continue reading