Citrus farmers have faced challenges recently, including citrus greening disease, weak exports, competition from substitutes, and high inflation, all of which combined have caused revenues to plummet.
Despite these difficulties, the industry performed surprisingly well during the pandemic — thanks to a surge in consumer demand for immune-boosting foods combined with dynamic citrus loans that allowed farmers to bridge cash flow gaps and invest in disease management.
These citrus loans are continuing to help the industry stay competitive despite the current threats it is facing.
The state of citrus farming in the US
The citrus industry is currently characterized by a high degree of fragmentation, with owner-operators running the vast majority of farms.
Citrus loans are designed primarily to help these owner-operators manage cash flow, upgrade equipment, and adopt sustainable practices in their daily grove operations. These financing solutions can be used to fund everything: planting new groves, irrigation, pest control, expansions, etc.
Florida citrus growers face unique challenges.
Citrus fruits remain very popular in the US, with oranges ranking fourth in consumption after bananas, apples, and melons.
Florida, California, Arizona, and Texas have historically dominated US citrus production since the 16th century.
But the industry has been battling headwinds from multiple fronts — from climate change to pests to diseases.
Since 2005, orange production in Florida has declined by 90%. The number of citrus growers and processing facilities has dramatically decreased, too. This crisis has far-reaching economic consequences.
Why is this happening? Citrus trees (mainly originating from Southeast Asia) thrive in specific climates and tend to be vulnerable to weather extremes and diseases. Hurricanes frequently batter citrus-growing regions and cause crop damage, sometimes even uprooting trees.
And because it takes several years for citrus trees to bear fruit, the industry is particularly susceptible to long-term disruptions.
For example, Hurricanes Irma and Ian devastated Florida’s citrus industry, producing record-low crop yields.
Aside from the threat of hurricanes, Florida’s citrus growers must also grapple with citrus greening disease—an incurable condition spread by an invasive insect that reduces fruit quality and quantity, leading to plummeting yields.
Do you own a citrus farm in Florida? Don’t worry — there are citrus loans available to help you weather these storms and invest in disease management. Private Capital Investors can help you acquire financing for citrus farms not just in Florida but also around the US, including Denver and Texas.
Getting started on citrus loans
Essential tips to remember:
- Check and update your business plan regularly.
- Get advice from financial experts who know about farming.
- Look for different ways to borrow money, like loans or grants.
- Share ideas and resources with other farmers.
As a citrus fruit grower, your primary customers will be stores and restaurants that expect you to be able to supply them regularly.
You must manage your farm’s money wisely and use citrus loans prudently to keep these clients happy and keep your operations profitable.
The average cost to start a citrus farm is around $5 million, which is enough to cover expenses like buying land, building structures, planting trees, and paying bills for the first few years (because it takes time for a citrus farm to generate income).
To get this money, you’ll need a strong business plan — one that explains your farm’s potential to investors or lenders.
This plan has to impress investors and show them that you have expertise in citrus farming. It should also highlight the market’s need for your intended produce and explain what makes your farm unique.
Once you have a business plan, you can start exploring different sources of citrus loans. Here’s a quick look at potential financing solutions you might qualify for:
1. Citrus loans from banks
Banks that offer agricultural loans are a common funding source for citrus farms. Many regional and community banks have deep roots in agricultural areas and can provide specialized lending products for farmers. These banks often have a better understanding of local farming conditions and can provide you with more personalized service.
To get a bank loan, you’ll need a solid plan outlining your goals and financial projections, as well as information about your farm’s past performance (if you already have a farm up and running).
Be clear about how you intend to use the money — whether it’s to cover costs like buying land and equipment, getting your farm up and running, or all of the above.
Show the bank how much revenue you can make from your farm when you can expect to start generating that revenue, and how you intend to pay back the loan.
2. SBA loans for citrus farms
The Small Business Administration (SBA) also offers loans for farmers who want to buy modern equipment and improve their farming methods.
The funding can fund essential improvements such as switching to advanced irrigation systems, buying modern harvesting equipment, and implementing the latest pest management strategies.
Here are some tips on successfully securing a citrus loan from the SBA:
- Look for SBA-approved lenders specializing in farm loans and ask them what their requirements are so you can prepare.
- Be ready to present a business plan that clearly outlines your goals, financial projections, and how you intend to use the loan proceeds.
- Prepare to provide tax returns, financial statements, and cash flow projections.
- Work on your credit score to increase your chances of approval.
3. Grants and assistance programs for citrus farms
Besides loans, you can also look for funding from government agencies, charities, and other groups that support farming businesses. These groups are not just lenders — many of them also fund research and development efforts to support the agricultural industry’s transition to sustainable practices.
Some of these organizations also offer mentorship, training, and networking opportunities to help farmers like yourself overcome regional challenges and capitalize on emerging trends.
Where can you find citrus grants? The availability of assistance programs changes all the time, so you need to be proactive.
Routinely check the websites of the following organizations for announcements:
Government agencies:
- USDA
- Natural Resources Conservation Service
- Farm Service Agency
- Environmental Protection Agency
Non-profits:
- The Nature Conservancy
- The Foundation for Food and Agriculture Research
Other potential sources:
- Land-grant universities sometimes conduct agricultural research and offer extension programs with educational resources and potential funding opportunities
- Farm credit associations and cooperatives provide financing and other services to citrus farmers.
4. Crowdfunding your citrus farm
Sometimes, it’s hard for new (start-up) farms to get traditional loans from conservative lenders. Crowdfunding is a novel and effective way to raise money in some cases.
The key is to share your farm’s story online in a compelling way and get people to invest in your project.
- Tell a great story about your farm. Share your history and tell people about your values to create an emotional connection with potential backers.
- Clearly explain your plans and how people’s commercial real estate hard money lenders will be used. Your goal should be to build transparency and trust. Provide an overview of how funds will be allocated.
- Highlight what makes your farm different. For example, do you use sustainable practices? Do you grow unique citrus varieties? Do you have community involvement initiatives? Unique selling propositions such as these can help you attract investors.
- Offer rewards to people who invest in your farm. This could be in the form of farm-fresh produce sent to them regularly, exclusive merchandise, or even free farm tours — fun and useful incentives that encourage people to contribute.
5. Citrus loans from venture capital and angel investors
Venture capitalists and angel investors are interested in businesses that can proliferate, so to get their attention, you need to demonstrate that your citrus farm can make a lot of profit right away.
In a short amount of time. To get investors interested:
- Network with investors at industry events and show them that you know a lot about farming.
- Prepare an elevator pitch about your farm, like a summary of your business plan and financial forecasts. Supply the investor with detailed information later, if they’re interested.
- Be open to different investment deals beyond loans. Some investors may be interested in equity-based investments (where they receive ownership shares).
Private Capital Investors: Your partner in citrus farm financing
Whether you’re a seasoned investor looking to expand your portfolio or a new farmer needing capital, Private Capital Investors offers tailored financing solutions for your citrus farm.
We offer several types of citrus loans:
- Planting loans are designed to help you start new groves and can be used to fund land clearing and planting activities.
- Operating loans can help you cover daily farm expenses like improving irrigation systems and pest control strategies.
- Expansion loans are financing solutions that let you grow your farm, whether by increasing your acreage or changing crops (or both).
Here’s a quick look at how our citrus loans work:
- Borrow up to 70% of your property’s value.
- Enjoy a 30-year loan term with no prepayment penalties.
- Our citrus loans can be as small as $3 million to as hefty as $50 million.
- Choose from adjustable or fixed interest rates.
- Get your loan in as little as two weeks.
While we specialize in citrus loans for forms in Florida, Texas, and Denver, our services are available nationwide. Contact the Private Capital Investors team today to talk about your citrus farming project and get a custom loan solution.
