Contactless Payment Technology

Contactless payment technology utilizes radio frequency identification (RFID) and near-field communication (NFC) to enable transactions. Customers can make purchases with contactless payments by holding their card or smartphone near a POS machine that supports the technology. This allows for quick and seamless transactions, eliminating the need for physical contact or the insertion of a card into a terminal.

Security of Contactless Payments

One of the questions that users often ask is, “Is contactless payment secure?” Research by the Surrey Centre for Cyber Security has found that certain contactless payment technologies, such as Apple Pay and Visa, can be vulnerable to fraud. However, the security of contactless payments has significantly improved over the years.

According to an article by Fiserv, EMV (Europay, Mastercard, and Visa) chip technology is widely used in contactless payment cards and provides high security. These cards are more resistant to counterfeiting than their magnetic stripe counterparts because their chips can’t be copied or tampered with. Additionally, contactless transactions typically have a low transaction limit. After a certain number of transactions, a reset with chip and PIN in contact mode is required. This helps to prevent unauthorized and repeated small purchases in case of a lost or stolen card.

Types of Fraud

While contactless payments have robust security features, no system is completely immune to fraud. As with any form of digital technology, there are vulnerabilities that fraudsters may attempt to exploit. Let’s take a closer look at some common types of fraud associated with contactless payments:

Card Skimming

The Seattle Credit Union defined card skimming as using illegal card readers, known as skimmers, that are discreetly placed on legitimate payment terminals. These skimmers are designed to capture card information, including the card number, expiration date, and the user’s name. Fraudsters then use this stolen information to create counterfeit cards or make unauthorized online purchases. While contactless payments have made it more difficult to skim physical cards, fraudsters may still attempt to capture card data through other means, emphasizing the importance of staying vigilant.

Data Interception

Hackers with advanced technical skills may attempt to intercept data during the communication between the contactless card or device and the payment terminal. By exploiting vulnerabilities in the communication process, they can access sensitive payment information, potentially leading to unauthorized transactions. Encryption and other security measures are designed to prevent such interception, but as technology advances, so do the tactics of cybercriminals.

Lost or Stolen Devices

Like traditional payment cards, contactless-enabled devices and cards can be lost or stolen. If an unauthorized individual gains access to a lost or stolen device, they can make transactions without the owner’s consent. Many contactless payments have transaction limits to mitigate this risk. However, it’s still crucial to promptly report lost or stolen devices and ensure they are protected with locks or biometric authentication.

Social Engineering

An article by Imperva explains that social engineering involves manipulating individuals into divulging confidential information or performing actions compromising security. In contactless payments, fraudsters might impersonate legitimate entities, such as banks or payment providers, through phishing emails, phone calls, or even fake websites. They may request sensitive information like card details, PINs, or passwords under false pretenses. Educating yourself about common social engineering tactics and exercising caution when sharing personal information can help thwart such attempts.

Relay Attacks

Research by the University of Birmingham describes relay attacks as intercepting the communication between a contactless card and a payment terminal using special devices. This attack requires the fraudster to be close to the card and the terminal. The intercepted data is then relayed to another location, potentially allowing the attacker to make unauthorized transactions. To counter relay attacks, future contactless payment systems may incorporate additional security measures, such as distance-based authentication or advanced encryption techniques.

Measures To Protect Contactless Payments

To enhance the security of contactless payments, both consumers and payment service providers can take proactive steps:

Enable Device Locks and Biometric Authentication

Securing your NFC-enabled devices with robust biometric locks, such as fingerprint or facial recognition, adds an extra layer of protection. In addition, setting strong passcodes or PINs for unlocking your device can thwart unauthorized access. This ensures that even if your device falls into the wrong hands, malicious actors won’t be able to easily access your contactless payment apps.

Regularly Monitor Transactions

Keeping a vigilant eye on your account statements and transaction history is essential. Regular monitoring enables you to quickly detect any suspicious or unauthorized activity. Contact your financial institution or payment provider immediately to address the issue if you notice any unfamiliar transactions.

Utilize RFID-Blocking Wallets and Sleeves

According to NordVPN, RFID-blocking wallets and sleeves are designed to shield your contactless cards and devices from unauthorized scanning. These accessories use materials that block electromagnetic signals, preventing fraudsters from remotely capturing your card information. When not using your contactless card or device, keeping it in an RFID-blocking wallet or sleeve can offer an added layer of security.

Keep Software Up to Date

Ensure that your NFC-enabled devices, operating systems, and payment apps are regularly updated with the latest security patches. Software updates often include fixes for known vulnerabilities and help protect your device from potential exploits that fraudsters may attempt to exploit.

Educate Yourself About Scams

Knowledge is a powerful tool in combating fraud. Educate yourself about common scams and tactics fraudsters use, such as phishing emails, fake websites, and social engineering. Be cautious when sharing personal information, and verify the authenticity of any communication that requests sensitive details.

Future of Contactless Payments Security

The evolution of technology never rests, and the world of contactless payments is no exception. As the digital landscape continues to advance, so too will the security measures employed to protect the integrity of contactless transactions. Looking ahead, several exciting developments are on the horizon that promises to enhance the security of contactless payments:

Biometric Authentication Advancements

Biometric authentication, such as fingerprints, facial recognition, and even iris scans, has gained traction as a highly secure method of verifying identity. In the future, contactless payment systems may increasingly integrate biometric data as an additional layer of security. This would make it even more challenging for unauthorized individuals to access your payment information, as biometric features are unique and difficult to replicate.

Blockchain Technology Integration

An article published in TechNewsWorld reveals that blockchain, a decentralized and tamper-resistant digital ledger, has the potential to revolutionize contactless payment security. By recording transactions transparent and immutable, blockchain could enhance the transparency, traceability, and overall safety of contactless payments. The decentralized nature of blockchain could make fraudulent activities more difficult to execute while also simplifying the process of detecting and preventing unauthorized transactions.

Advanced Encryption Techniques

Encryption plays a pivotal role in securing contactless transactions. As encryption algorithms and techniques continue to evolve, future contactless payment systems could employ even stronger and more sophisticated encryption methods. This would make it increasingly difficult for hackers to decipher intercepted data, further safeguarding sensitive payment information.

Conclusion

Contactless payments have undeniably revolutionized the way we make transactions, offering unparalleled convenience. While security concerns persist, technology has made significant strides to protect sensitive information and prevent fraud. By staying vigilant, adopting best practices, and embracing emerging security advancements, we can continue to enjoy the benefits of contactless payments without compromising our financial safety.

Are you ready to embrace the future of seamless and secure transactions? Stay informed, stay protected, and enjoy the convenience of contactless payments in today’s digital age! Get in touch for more information!

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The Purpose and Promise

The USDA Food Supply Chain Guaranteed Loan program was designed to fill a crucial gap in the food supply chain by focusing on projects in the “middle of the food supply chain.” Unlike other USDA guaranteed loan programs, which primarily cater to rural markets, this program had a unique feature – it could be used to finance rural and urban projects. The intent was clear: to foster diversity, security, and resilience in the U.S. food supply chain.

The program’s promise lay in its ability to provide financial support to businesses and organizations that played pivotal roles in the food supply chain but often struggled to secure funding through traditional means. These projects ranged from food processing facilities to distribution centers, and the goal was to create a more sustainable and robust system capable of withstanding unforeseen challenges, such as the disruptions caused by the COVID-19 pandemic.

The Fall of the Food Supply Chain Program

The USDA Food Supply Chain Guaranteed Loan program was canceled in May 2023. It was not due to any inherent flaws in the program itself, but rather as a result of broader political negotiations. President Joe Biden and U.S. House of Representatives Speaker Kevin McCarthy engaged in discussions aimed at increasing the U.S. debt limit. These negotiations culminated in the creation of the Fiscal Responsibility Act (FRA).

The FRA was a budgetary policy that sought to reduce the deficit by $1.5 trillion over the course of a decade while safeguarding critical benefits such as social security, Medicare, and Medicaid. Importantly, no cuts were made to the President’s landmark policy achievement, the Inflation Reduction Act. Instead, the FRA targeted unspent COVID-19 funds, including those allocated through the ARPA, which included the remaining guaranteed loan authority for the Food Supply Chain program.

Impact and Implications

As a result of the FRA, the USDA Food Supply Chain Guaranteed Loan program saw its future prospects dashed. Loans that had already been approved and funded under the program remained unaffected, the cancellation of unspent funds meant that no additional financial support would be available for future projects. 

One of the program’s standout features was its ability to finance urban projects, a departure from the typical rural focus of USDA guaranteed loan programs. This aspect was particularly appealing, as it recognized the importance of urban areas in the food supply chain and aimed to address their unique challenges.

The rise and fall of the USDA Food Supply Chain Guaranteed Loan program offers a glimpse into the complexities of government initiatives and the impact of political negotiations on well-intentioned programs. Despite its potential to create a more resilient, diverse, and secure U.S. food supply chain, the program became a casualty of budgetary compromises.

While the program’s cancellation may have left some disappointed, it serves as a reminder of the need for ongoing efforts to strengthen the nation’s food supply chain. As the agricultural landscape continues to evolve, it remains crucial for policymakers and stakeholders to explore innovative ways to address the vulnerabilities in the food supply chain and ensure its long-term sustainability. While the Food Supply Chain program may be a chapter of unfulfilled promise, the quest for a more robust and secure food supply system must continue through other avenues and initiatives.

The post The Rise and Fall of the USDA Food Supply Chain Guaranteed Loan Program appeared first on First National Bank of Oklahoma.

According to the US Department of Agriculture (USDA), the Rural Energy for America Program (REAP) offers loan financing and grant funding to rural agricultural producers and rural small businesses. It should be used for renewable energy efforts, such as biomass, geothermal, hydropower, and wind and solar generation. This grant offers a wide range of financial and technical support that can help farmers purchase new renewable energy equipment, conduct energy efficiency audits, and make other improvements that can help them save money and improve their operations. It’s an important resource for farmers and the agricultural industry as a whole.

USDA Eligibility for REAP Grants:

To be eligible for the USDA REAP grant, applicants must meet certain criteria. This includes being a rural small business or agricultural producer located in the United States. Applicants must own the project, and own or control the site for the project. Additionally, applicants must be able to demonstrate that their proposed energy efficiency project will provide savings on energy costs and reduce greenhouse gas emissions. The USDA also requires that the energy efficiency project be technically feasible, financially viable, and demonstrate a reasonable return on investment. Our team at First National Bank of Oklahoma is very familiar with the REAP grant requirements and can help you evaluate whether this program fits your needs. 

The USDA REAP program has been supercharged by the Inflation Reduction Act, which increased the size of the maximum REAP grant request to $1,000,000 for “renewable energy systems” and $500,000 for “energy efficiency improvements.” Renewable energy systems are defined as “a system that produces usable energy from a renewable energy sources and may include distribution components necessary to move energy produced by such system to initial point of sale and other components and ancillary infrastructure of such system,” such as wind, solar, renewable biomass, ocean, geothermal, or hydroelectric systems. Energy Efficiency Improvements are defined as “improvements to or replacement of an existing building or systems and/or equipment, owned by the applicant, that reduces energy consumption on an annual basis,” such as insulation, efficient lighting systems, and heating and cooling system upgrades. Grant request for both categories are limited to 50% of eligible project costs, which include 1) purchase and installation of new or refurbished equipment; 2) construction, retrofitting, replacement, and improvements; 3) fees for construction permits and licenses/fees required by an interconnection agreement; and 4) professional service fees related to the project for qualified consultants, contractors, installers, or other 3rd parties. 

The USDA REAP grant is available to all types of agricultural producers, including farmers, ranchers, forest owners, and other agribusiness operators. REAP grants are also available to rural small businesses. The grants are available for two main forms of assistance: financial grants and technical support. The financial grants are used to purchase new equipment or make energy efficiency upgrades to eligible buildings located in rural areas. This can include things like energy-efficient lighting, heating and cooling systems, irrigation systems, greenhouses, and more. The technical support component of the grant provides educational resources to help farmers understand how to use their new equipment or energy efficiency upgrades. This includes workshops on topics, such as solar power usage, crop rotation strategies, and soil testing techniques. These educational resources can help farmers learn how to get the most out of their investments in new technology or upgrades.

Location Requirements for REAP Grants:

To qualify for a REAP Grant, projects must be located in a rural area. To determine whether your project qualifies, check out First National Bank of Oklahoma’s mapping tool located here. 

Can USDA Reap Grants Be Combined With Other Solar Incentives?

In addition to USDA REAP grants, various solar incentives and programs are available at the federal, state, and local levels. These incentives can include tax credits, rebates, net metering, and renewable energy certificates (RECs). Each incentive program has its own set of eligibility criteria and requirements. Combining the USDA REAP program with other solar incentives has the potential to maximize financial benefits and accelerate the return on investment for solar projects. The USDA Reap Grant can be used in combination with other solar incentives, such as the Solar Investment Tax Credit (ITC) or solar renewable energy credits (SRECs). These additional incentives can help reduce the cost of installing a PV system, allowing farmers to take advantage of lower electricity rates and save money on their utility bills.

In addition to federal incentives, there are also state-level incentive programs that can be combined with the USDA REAP Grant. For example, in California, farmers may qualify for additional funds through the Self-Generation Incentive Program (SGIP) or the California Solar Initiative (CSI). While these incentives can help lower costs and increase returns on investment, it is important to remember that each incentive program has different requirements and qualifications. It is important to speak with an experienced solar installer who can guide you through the process and ensure that you are taking advantage of all available incentives.

Timelines:

The USDA REAP program was accelerated through the Inflation Reduction Act, which has created new application deadlines on the last day of the calendar quarter through September 30, 2024. There is no guarantee the REAP Grant program will be extended, so it is important to work diligently on your project now while the funding window is open! 

Conclusion:

The USDA REAP Grant is a valuable resource for farmers and rural businesses to help them reduce their energy costs, increase their profits, and create jobs in the community. With its focus on renewable energy sources like wind and solar power, this grant provides an innovative way of helping rural communities stay economically competitive while also promoting sustainability.

Whether you’re looking to install a new system or upgrade an existing one, the USDA REAP Grant can help make sure your project is successful. To maximize your chance of success, we recommend working with an experienced USDA packager who has experience working with the agency. First National Bank of Oklahoma has written many REAP grant applications and would be happy to visit with you about helping you apply for this special grant program. 

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However, before you embark on this exciting journey, it’s crucial to consider various factors to ensure a successful and fulfilling investment. Ranching is not merely a hobby but a lifestyle that demands dedication and active involvement. 

In this blog post, we will explore key considerations that will guide you through the process of buying a ranch, helping you make informed decisions and avoid potential pitfalls. Read on so you can embark on a rewarding journey of owning a ranch that brings you closer to the fulfilling lifestyle you desire.

How Much Time Will Be Required? 

Mason & Morse Ranch Company emphasizes the importance of conducting due diligence, which can take anywhere from 30 days to 90 or more days, depending on the nature of the property. During this due diligence period, you’ll have the opportunity to evaluate the ranch and its suitability for your needs. 

Before diving into the due diligence phase, it’s essential to undertake the initial steps of finding the right land and selecting the perfect property for your ranching aspirations. 

SmartAsset advises that this process involves thorough research, visiting potential properties, and carefully assessing factors like location, accessibility, size, and desired amenities. Additionally, you’ll need to secure financing for your land purchase, explore mortgage options or alternative funding sources, and determine a budget that aligns with your financial goals.

Once you’ve identified the ideal ranch property, the next step is making an offer and completing a land purchase agreement. This involves negotiating terms and conditions, discussing contingencies, and reaching an agreement that protects your interests as the buyer. 

It’s crucial to communicate openly with the seller and consult with professionals such as real estate agents or attorneys to ensure a smooth and legally sound transaction.

Where Will I Buy Livestock? 

When planning to buy a ranch in the U.S., it’s also important to consider where you will buy your livestock. If the ranch you’re purchasing already has livestock, speak with the owner about where they bought the animals and where they take sick animals. 

Visit local livestock shows or breeding farms, depending on what type of animals you want to buy. According to Business Companion, it is in your best interest to verify essential details such as the identity, breed, sex, age, pedigree, farm-assured status, and health status of the livestock before finalizing a purchase. If you have any doubts or uncertainties, it is imperative to ask the seller for any additional information or clarification.

Once you have purchased the new animals, taking precautions to prevent the spread of diseases within your herd or flock is critical. The Pennsylvania State University recommends isolating newly purchased animals from their new herd or flock mates for three to four weeks after arriving at your ranch. 

This allows you to monitor their health and minimize the risk of introducing potential diseases to your livestock. Additionally, it is advisable to transport new animals in a clean truck or trailer to maintain biosecurity and prevent the transmission of pathogens.

To further safeguard the health of your livestock, it is advisable to conduct necessary tests on newly purchased animals before transporting them to your ranch. This proactive approach can help prevent the introduction of health issues that may have long-term detrimental effects on your ranching operation.

Will I Realize Tax Savings From My Agricultural Venture? 

The University of New Hampshire highlights that the Internal Revenue Service (IRS) evaluates various criteria to determine whether a business is a for-profit activity or a hobby. These criteria include factors such as your intent to make a profit, the reliance on the income for your livelihood, and the consistent profit generation over multiple years.

To further explore the tax advantages available for your farm or ranch, the University of Nebraska provides valuable insights. Use a portion of your home exclusively to manage your operation and have no other location to complete such tasks. 

Additionally, as a cash basis taxpayer, you can write off the inputs you purchased this year, such as seed and fertilizer, for next year’s crop. The tax benefits of these deductions and expenses will vary based on your current federal tax bracket, with potential savings equal to a percentage of the contribution or expenditure.

Other Considerations When Purchasing a Ranch Property 

The University of Maryland suggests some considerations to ensure a well-informed decision about purchasing a ranching property. Firstly, it is crucial to evaluate the productivity of the farm. Assess whether the land is suitable for your intended agricultural activities and if it has the potential to yield the desired results. 

Another critical consideration is aligning the ranch’s location and regulatory environment with your marketing strategies and income goals. Additionally, evaluate the reasonableness and realism of the farm’s price concerning your financial goals. 

Lastly, be aware of zoning regulations, covenants, easements, or restrictions that may impact your ability to produce or sell your desired products in your preferred locations.

Make Your Ranch Ownership Dreams a Reality

Considering the various factors discussed in this blog post is essential when learning how to buy a ranch. By thoroughly evaluating the time commitment, livestock sourcing, potential tax savings, and other important considerations, you can make informed decisions that align with your goals and aspirations as a ranch owner.

Now that you have gained valuable insights and knowledge, it’s time to take action. If you are ready for ranch ownership, do not hesitate to contact us today. Explore available ranch properties in your desired location and start the process of buying your dream ranch today.

The post Considerations When Buying a Ranch appeared first on First National Bank of Oklahoma.

Understanding Credit Scores

If you want to boost your credit score to buy land or modernize your farming equipment, it’s vital to understand the basics of credit scores. According to Equifax, a credit score is a numerical rating that indicates an individual’s creditworthiness or a person’s qualification for financial assistance. They are commonly used by lenders, such as banks and credit card companies, to assess the risk of lending money to a person. Credit scores are calculated based on various factors related to a person’s credit history and financial behavior. According to Experian, a credit score ranges from 300 to 900. In general, here’s how each tier of score is viewed:

• Poor credit score: 300-579
• Fair or passing credit score: 580-669
• Good credit score: 670-739
• Very good credit score: 740-799
• Excellent or exceptional credit score: 800-850

Factors That Affect Your Credit Score

Here are some of the key elements you want to keep an eye out for that influence credit scores:

• Payment History: Your credit history is one of the most critical factors affecting your credit score. Lenders want to see a record of consistent, on-time payments. Late payments, defaults, or accounts sent to collections can significantly lower your credit score.
• Credit Utilization Ratio: This ratio compares the amount of credit you currently use to your total available credit. It’s calculated by dividing your credit card balances by your credit limits. Keeping your credit utilization ratio low (typically below 30%) is generally recommended for a good credit score.
• Credit History Length: The length of your credit history is another influential factor. A longer credit history allows lenders to assess your credit management behavior over time. It considers factors such as the age of your oldest account, the average age of all your accounts, and how recently you’ve used them.
• Credit Mix: A healthy mix of different types of credit — such as credit cards, loans, and mortgages — can positively impact your credit score. It demonstrates your ability to handle various credit obligations responsibly. However, it’s important only to take on credit that you can manage comfortably.
• New Credit Inquiries: When you apply for new credit, such as a loan or credit card, lenders typically pull your credit report to assess your creditworthiness. These inquiries are recorded on your credit report and can momentarily lower your credit score.

Significance of Good Credit Score for Agricultural Loans

Having good credit is crucial when applying for agricultural loans. Here are some reasons why good credit is significant in the context of agricultural loans:

• Lower Interest Rates: Lenders determine the interest rates for agricultural loans based on the borrower’s creditworthiness. A higher credit score often translates to lower interest rates. Good credit makes you more likely to qualify for favorable loan terms, including lower interest rates.
• Higher Loan Limits: A good credit score enables you to access higher loan limits. Lenders are often willing to lend larger amounts to borrowers with a proven track record of responsible credit management. This can benefit agricultural operations that require substantial funding for equipment purchases, land acquisition, or expansion.
• Flexible Financing Options: Good credit offers a broader range of financing options. It allows you to explore different loan products and lenders and find the best fit for your specific agricultural needs. With a strong credit profile, you may have access to specialized agricultural loans with favorable terms and conditions tailored to the industry.

Steps To Improve Your Credit Score

If you want to attain the credit score needed to buy land, here are some steps you can take:

• Review Your Credit Reports: Start by obtaining free copies of your credit reports from the three major credit bureaus (Equifax, Experian, and TransUnion). Review the descriptions carefully and check for errors. If you find any, dispute these errors with the credit bureaus to have them corrected.
• Pay Bills on Time: Payment history is a significant factor in credit scoring. Make it a priority to pay all your bills on time, including credit card, loan, and utility bills.
• Manage Credit Card Usage: High credit card balances concerning your credit limits hurt your overall credit score. Try your best to maintain a credit card use ratio of less than 30%.
• Manage Credit Accounts: Be cautious about opening new credit accounts unless necessary. Opening multiple accounts within a short period can raise concerns for lenders.
• Establish a Solid Payment History: If you have a limited credit history or a few negative marks, focus on establishing a solid payment history. Consistently making on-time payments over time demonstrates responsible credit management and can improve your credit score gradually.

Apply for an Agricultural Loan Today

Agricultural loans and credit scores are inseparable. Without establishing and maintaining a favorable credit score, you’re limiting yourself to potential borrowing opportunities. If you’re interested in financing your agricultural operation, contact our team and find the perfect loan solution for your unique needs.

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Whether you are a small-scale farmer looking to expand your operations or a seasoned agricultural entrepreneur planning to invest in modern equipment, understanding how to qualify for an agricultural loan is essential. This blog post will explore what an agricultural loan entails and its potential uses. We’ll also provide a step-by-step guide on applying and qualifying for these types of loans. 

What Is an Agricultural Loan?

An agricultural loan, also known as a farm loan or ranch loan, is a specialized loan program designed to meet the unique needs of individuals and businesses involved in agriculture. Banks, credit unions, and government programs typically offer these loans. Agricultural loans come with specific terms and conditions tailored to the farming and ranching industry, making it easier for farmers, ranchers, and agribusinesses to obtain the necessary funds for their operations.

What Can Agricultural Loans Be Used For?

Agricultural loans can be utilized for various purposes related to farming, ranching, and agricultural businesses. Here are some common uses:

• Land Acquisition: Farmers and ranchers can use agricultural loans to purchase additional farmland or expand their existing holdings.
• Equipment and Machinery: Loans can be used to invest in modern farming equipment, machinery, and tools, enabling increased efficiency and productivity.
• Livestock and Poultry: Ranchers may require funds to buy livestock or poultry for their farms, which they can finance through agricultural loans.
• Crop Production: Loans can be utilized to cover the costs associated with crop cultivation, including seeds, fertilizers, irrigation systems, and labor.
• Farm Infrastructure: Agricultural loans can be used to build or upgrade farm structures, such as barns, storage facilities, and greenhouses.
• Working Capital: Farmers often require additional working capital to manage day-to-day expenses, including labor costs, utilities, and other operational needs.

How To Apply for an Agricultural Loan

Applying for an agricultural loan requires careful planning and preparation. If you want to know how to get agriculture loans, here are some of your options:

• Loan Programs From Major Banks: This is the most common avenue for farmers seeking financial assistance. Most major commercial banks in the U.S. offer some sort of agricultural loan assistance program. 
• Government Loan Programs: Some farmers who don’t qualify for traditional bank loans turn to government programs for help. The U.S. Department of Agriculture has various bodies dedicated to helping farmers with financial needs.
• Agricultural Home Loans: Other than dedicated farming loan programs, the U.S. Department of Agriculture also offers community facilities programs for farmers looking for housing. This is applicable if you want to build a residential unit beside your farm.

How To Qualify for an Agricultural Loan

While eligibility requirements may vary among lenders and loan programs, here are some general factors that can increase your chances of qualifying for an agricultural loan:

• Credit History: Maintain a good credit score by making timely payments and managing your debts responsibly. Lenders often consider credit history to assess your financial reliability.
• Collateral and Equity: Having collateral, such as land or machinery, can strengthen your loan application. Lenders often require borrowers to have a certain level of equity in their farming operations.
• Financial Stability: Lenders assess your financial stability by reviewing your income, expenses, and profitability. Demonstrating a consistent income and positive cash flow increases your chances of approval.
• Experience and Expertise: Highlight your expertise in the agricultural industry. Lenders are more likely to approve loans for individuals with a proven track record in farming or related fields.
• Repayment Capacity: Show your ability to repay the loan by providing accurate financial projections and demonstrating that the loan amount can be serviced within your farm’s expected cash flow. Maintaining several years of organized, complete, and accurate financial statements lends credence to your credit application. 

The Bottom Line

Securing an agricultural loan can provide the necessary financial support for farmers and agribusinesses to achieve their growth objectives. By understanding what agricultural loans entail, exploring their potential uses, and following the steps outlined above, you can enhance your chances of qualifying for an agricultural loan.

Remember, thorough preparation, a well-crafted business plan, and meeting the lender’s requirements are vital to securing the funds you need to drive your agricultural endeavors forward. Understanding the specifications for each loan program you want to try is also critical. Qualify for our agricultural loan program now!

The post How To Qualify for an Agricultural Loan: A Comprehensive Guide appeared first on First National Bank of Oklahoma.

This blog post will explore these two loan programs and help you grasp the nuances that set them apart. By understanding FHA loans, USDA loans, and their eligibility requirements, you will be better equipped to navigate the loan application process and make a choice that aligns with your needs. Read on and discover the factors that differentiate FHA vs. USDA home mortgage loans.

What Is an FHA Home Mortgage Loan? 

As defined by the Consumer Financial Protection Bureau, private lenders offer an FHA loan monitored and insured by the Federal Housing Administration (FHA). Unlike conventional loans, the FHA does not directly lend the money; instead, it provides insurance to lenders, reducing their risk. 

The U.S. Department of Housing and Urban Development states that the Federal Housing Administration offers FHA loans tailored for seniors and individuals seeking financing for mobile homes and factory-built housing. This ensures accessible homeownership opportunities for a wider range of individuals.

One of the key advantages of FHA loans is their flexibility in down payment requirements, allowing for as low as a 3.5% down payment. Additionally, FHA loans often accommodate borrowers with lower credit scores, making them a more accessible option than most conventional loans.

As highlighted by Investopedia, these loans are primarily designed to help moderate-to-lower-income families achieve their dreams of homeownership. This makes FHA loans particularly popular among first-time homebuyers. 

The creation of the FHA by the government aims to mitigate risk for lenders and simplify the qualification process for borrowers seeking home loans. Even if you have had challenges with your credit history or cannot provide a substantial down payment, an FHA loan may still be viable for you.

It’s important to note that the maximum loan amount for an FHA loan varies by county. Therefore, it’s crucial to understand the specific limits set for the area where you plan to purchase your home.

What Is a USDA Home Mortgage Loan?

Now that you understand what an FHA loan entails let’s explore its counterpart, the USDA loan.

Backed by the United States Department of Agriculture, this home mortgage program aims to assist individuals with low-to-moderate income levels in their quest for homeownership. As explained by Business Insider, USDA loans are specifically tailored for those who wish to purchase homes in rural or suburban counties. Much of First National Bank of Oklahoma’s core service area in central, northern, and northeast Oklahoma qualifies as rural or suburban. 

One remarkable aspect of USDA loans, as highlighted by US News, is the potential to finance up to 100% of the appraised value of the property without requiring a down payment. Just imagine the freedom and relief of securing a home loan without the immediate burden of a substantial upfront cost. The ability to secure 100% of appraised value financing is ultimately determined by the lender, and is not typically offered by First National Bank of Oklahoma. 

When exploring USDA home mortgage loans further, it’s essential to understand the two types of loans available, as per Investopedia. 

The first is the Guaranteed USDA Home Mortgage Loan, which involves the USDA guaranteeing 90% of the mortgage value to eligible individuals who secure their loan through a bank or another commercial lender. This guarantee reassures the lender, allowing them to provide favorable terms and conditions to borrowers. 

On the other hand, the Direct USDA Home Mortgage Loan is a loan that the USDA directly offers, specifically tailored for individuals with very low- and low-income levels. It is particularly suitable for those who face challenges in obtaining an affordable mortgage through conventional channels and require secure and sanitary housing options. These loans typically take more time to close than Guaranteed USDA Home Mortgage Loans and can involve significant paperwork requirements. 

You can confidently explore this financing option by understanding the ins and outs of USDA home mortgage loans. You can also potentially realize your dream of homeownership in a tranquil rural or suburban setting.

Differences Between FHA and USDA Home Mortgage Loans

Regarding home financing programs, weekand.com outlines that USDA and FHA home mortgage loans are designed to make housing more accessible for citizens and qualifying immigrant non-citizens. These programs share a similar goal but have notable differences that you should be aware of when looking for your home financing option.

USDA home mortgage loans are made to help low-income buyers purchase homes in rural areas. This is a popular product within First National Bank of Oklahoma’s Ponca City and Tonkawa trade areas. Conversely, FHA loans provide opportunities to buy homes in metropolitan or rural areas if borrowers do not exceed the maximum loan limits that the government sets for the specific location. First National Bank of Oklahoma does not originate as many FHA loans as it does USDA loans. 

Looking at the costs associated with these loans, FHA loans tend to be much more expensive than conventional loans for borrowers with good credit and a medium down payment of around 10% to 15%. However, FHA loans can often be the most affordable choice for borrowers with lower credit scores or those with a smaller downpayment. These loans offer a viable option for individuals who may find it challenging to meet the strict requirements of conventional loans.

USDA loans generally have reduced costs compared to FHA loans, according to the Consumer Financial Protection Bureau. Borrowers will pay an upfront fee and must pay ongoing mortgage insurance premiums to the USDA in exchange for the guarantee, but these are typically lower than the cost of the FHA home mortgage product.

Eligibility Requirements: USDA vs. FHA Home Mortgage Loans 

By now, you might be curious about the requirements for both types of loans. Meeting these criteria will pave the way for a smooth and successful loan application, bringing you closer to your homeownership goals.

According to the United States Department of Agriculture, USDA home mortgage loans come with specific guidelines that determine eligibility. One key requirement is that your household income must align with the established guidelines for low and moderate incomes. These limits vary depending on your location and the specific loan program. 

The property you intend to purchase must be in an eligible rural area, as defined by the USDA. This means that the population of the area should not exceed 35,000 residents. It’s important to note that the home you purchase with a USDA loan must be your primary residence. Curious if your location qualifies? Reach out to our USDA specialist at First National Bank of Oklahoma and we’ll run a quick search for you. 

While a credit score of at least 640 is generally ideal, qualification is still possible even if your score is lower. Having a clean record with no delinquency on any federal debt is crucial. Moreover, eligibility for USDA loans is limited to U.S. citizens or legal nonresidents.

Turning our attention to FHA home mortgage loans, CNBC emphasizes some essential requirements that you must meet to be eligible for this program. First and foremost, the property you intend to purchase with an FHA loan must be your primary residence, emphasizing the importance of this loan in facilitating homeownership for individuals like you. 

FHA loans provide the flexibility to acquire residential properties of up to four units as long as you plan to reside in one of the units. In addition, an FHA-approved home appraiser must conduct a special FHA appraisal to ensure the property meets the required standards. 

Regarding credit scores, FHA home mortgage loans offer options tailored to different financial situations. A credit score of 580 or higher is generally accepted, with a minimum down payment of 3.5%. If your credit score falls between 500 and 579, you may still qualify by providing a higher down payment of at least 10%. 

Unlike USDA loans, FHA loans do not impose income limits, allowing greater flexibility for borrowers. The maximum loan size varies depending on the property’s location, ranging from $472,030 to $1,089,300 for a single-family home. Lastly, the maximum debt-to-income ratio typically stands at 43%, although certain circumstances may permit higher.

Bring Your Homeownership Goals to Life

Exploring the differences between USDA vs. FHA home mortgage loans has shed light on each program’s unique features and eligibility requirements. Whether you’re drawn to the charm of rural living or the vibrant energy of metropolitan areas, these loan options provide avenues to fulfill your homeownership dreams. 

The USDA loan program opens doors for low-income borrowers in rural neighborhoods, offering the opportunity to purchase a home with zero down payment and generally lower costs than FHA loans. 

On the other hand, FHA loans provide a more flexible path to homeownership, with options for buyers in both metropolitan and rural areas, accommodating diverse credit scores and down payment capabilities.

If you need assistance navigating the complexities of home financing, do not hesitate to contact us today. We can guide you through the loan application process, explain the intricacies of eligibility requirements, and ensure you understand the financial implications.

The post What’s the Difference Between USDA and FHA Home Mortgage Loans? appeared first on First National Bank of Oklahoma.

Additionally, construction is a major consumer of manufacturing, mining, and various other services, making it one of the largest customers in these sectors. Construction business loans are designed for businesses in the construction industry and can provide funding for equipment purchases, payroll, and other business expenses. 

To obtain a construction business loan, assess your business’s financial health, determine your loan needs, gather necessary documentation, apply for the loan, and wait for approval. The process can be lengthy and challenging, but it can be done successfully with the right preparation and research. Read on to learn more about commercial construction loans.

What Are Commercial Construction Loans?

If you are a business owner or investor planning to construct or renovate a commercial property, you may need to consider taking out a commercial construction loan. This type of loan provides financing specifically tailored for commercial construction projects and can be a valuable tool for helping you bring your project to life.

The funds from a commercial construction loan can cover a variety of expenses related to your project, including the cost of materials, labor, and permits. These loans typically have various terms, interest rates, and repayment schedules, depending on the lender and the borrower’s circumstances.

Business Insider reports that a construction loan’s interest rate is usually higher than a regular mortgage. Lenders perceive construction loans as high-risk since there is no established property to serve as collateral, which is why they demand higher interest rates.

How Do Commercial Construction Loans Work?

According to Investopedia, commercial loans are typically provided to different types of businesses to assist with funding needs, whether for short-term operational expenses or the purchase of equipment necessary for production. These loans may also be used to cover more basic operational needs, such as payroll or purchasing supplies.

Collateral, which may include property or equipment, is often required and can be seized by the lender if the borrower defaults on the loan or goes bankrupt. In some cases, future accounts receivable may be used as collateral. 

Types of Construction Loans

Understanding the different types of commercial loans can help businesses make informed financial decisions and secure funding for their ventures. As per The Balance, there are several types of commercial loans. These include the following:

• Land Development Loan: Used to prepare raw or undeveloped land for commercial or residential use, including installing infrastructure.
• Interim Construction Loan: A short-term loan covering labor and material costs for commercial development projects, usually valid for 18 to 36 months.
• Mini Perm Loan: A short-term loan like a bridge loan that pays off outstanding loans for projects that will produce income, replaced by long-term financing after 2-3 years.
• A&D Loan: For purchasing raw land or underutilized/run-down property that needs improvements, covering the purchase and necessary improvements.
• Takeout Loan: Provides permanent financing for commercial projects with temporary loans, sometimes required before a short-term loan can be granted.

Why Get a Commercial Construction Loan
A commercial construction loan can offer the necessary funds to upgrade and improve an existing commercial property that needs renovations. Renovating your property can increase its value, attract new tenants or customers, and promote business growth.

If your business is expanding and you require additional space to cater to the growth, a commercial construction loan can provide the necessary funds to expand your existing commercial property or construct a new one. This can help you fulfill the needs of your clients or customers and boost your revenue.

For investors, a business construction loan can be an opportunity to invest in commercial construction loan properties and earn income through rental or resale. These loans can provide a way to enter the thriving commercial construction loan market and potentially achieve a high return on investment.

How To Get a Commercial Construction Loan

Getting a commercial construction loan is different from a home loan because it involves buying a property for business purposes and paying the loan with business revenue. Lenders have three main requirements to ensure that your business can cover the loan payments:

• Security: Investopedia notes that the majority of lending institutions mandate a minimum down payment of 20% for construction loans, while certain lenders may insist on a higher percentage, reaching up to 30-40%+. Property insurance is also essential, and the lender will check the property’s title for outstanding liens or claims.
• Income: Forbes states that a lower debt-to-income (DTI) ratio indicates a greater amount of available cash that can be allocated toward monthly loan payments. Lenders generally require a maximum ratio of 40-45% when approving construction loans, although this could be lower depending on the details of the individual project. 
• Credit: Lenders check your credit history and require a personal guarantee. CNBC explains that the minimum credit score required is typically between 660 and 720. Lenders assess your business’s revenue source and how long you’ve been in business. 

To make an informed decision, Market Business News recommends that you thoroughly research a selection of potential lenders. Further, you should actively negotiate the loan terms, which include crucial aspects such as the interest rate, loan amount, and repayment terms. 

Doing so can maximize your potential for obtaining a loan that aligns with your financial goals and protects your long-term financial well-being. Remember, careful consideration and effective negotiation can significantly impact your loan’s affordability and overall cost.

Grow Your Business With a Commercial Construction Loan

The importance of commercial construction loans lies in providing businesses with the financial resources to expand and grow their operations. With a commercial construction loan, businesses can acquire the funds they need to construct or renovate a commercial property, which can lead to increased revenue, improved business operations, and long-term growth.

If you’re a business owner looking to expand your operations, consider securing a commercial construction loan to acquire the funds needed for your project. Contact us today to learn more about business construction loan requirements and the application process.

The post Construction Business Loans: What Are They and How To Get One appeared first on First National Bank of Oklahoma.

This blog post is geared specifically to help parents educate their children about good credit-building and maintenance strategies. By making the financial system less daunting for your children, you can help them tackle future financial hurdles easily and confidently.

When Can You Start Building Credit?

The general answer to the question “What age can you start building credit?” is 18, but there’s more to it than that. According to CNBC, any young adult over 18 can begin establishing and growing their credit score. However, various states might impose varying limits on opening a credit account for a minor. 

Some states may have different age restrictions, so verify with your state. CNBC also states that several financial organizations may even permit credit card usage to minors under 18, provided they have the authorization to use them. It is vital — regardless of age — to impose a solid foundation for your children’s credit future as soon as possible.

How To Help Your Child Build Credit

If you want to help your child be better at credit and financial management, here are some strategies you can try depending on their age.

Before Turning 18

As previously stated, most states don’t allow minors under 18 to open a credit card account. At this stage, you’ll profit from learning and motivating tactics, as demonstrated by CNBC. However, you can also offer them hands-on experience by making them an authorized user on one of your credit cards. Here are some strategies for this: 

• Teach them the credit system: Educate them on the fundamentals of credit, starting with what a credit score is and how to read their credit report. You may help your child make wise financial decisions by helping them understand the process and principles underlying the credit system.
• Authorize them to use a credit card: With account authorization, several credit card companies enable parents to permit their children to use their credit cards. This way, your child will have first-hand experience using and managing credit cards.
• Teach them budgeting strategies: If you’re not yet confident about authorizing your children to use your account, you can teach them a few budgeting strategies. Allow them to handle their allowance or use a budgeting tool to assist them with controlling their finances.
• Emphasize the importance of paying bills on time: Although your children are not yet in charge of utilities, you may stress the significance of paying bills on time. Explain to them how late payments can hurt their credit score and how they should keep organized and pay their obligations on time.
• Incentivize saving: Rewarding your child for saving can teach them to respect money and the significance of financial discipline. For example, you could make it more engaging by having them compete to see who can save the most money in a month or by having them complete tasks to earn additional allowance.

After Turning 18

When your children reach 18, it becomes easier to assist them in building their credit scores since they may now create a credit card account in their own name, according to Lexington Law. 

Here are several approaches you can take:

• Create a student credit card for them: Student credit cards offer lower credit limits and may not often require a cosigner, making them an excellent starting point for young adults. Shop around for the finest deals and choose one with affordable interest to maximize their advantages.
• Create a secured credit card: A secured credit card is an excellent option if your children want something other than a student credit card. Secured cards require depositing money as collateral, serving as the credit limit. This way, they can still build their credit score without putting themselves at risk.
• Teach them about loans: Loans are a significant part of adulthood and are often needed to make substantial purchases like a car or a home. Explain to them the fundamentals of taking out loans, and let them know that they should always aim to pay off their loan appropriately.
• Co-sign a loan with them: If you co-sign a loan, you are legally accountable for the debt your children cannot pay. Consider co-signing a used-car loan to teach them how to manage their finances properly and avoid financial problems.
• Help them set big financial goals: Set long-term financial objectives with your children and explain the necessity of creating and adhering to a budget. Encourage children to save for the future, whether for a vehicle or retirement, so they may learn to prioritize their costs and make sound financial decisions.

Understanding How Credit Works

As a parent, you already know how the credit system works, but explaining it to your child could be tricky. Here’s an example of how you can simplify credit and help your children understand the basics, based on an explanation from the University of Oklahoma.

Taking “credit” involves borrowing money from a financial organization, such as a bank or credit card company, and you must repay it with interest. By using credit, you are boosting your credit score, allowing you to take out larger loans in the future to make larger expenditures.

Monitoring Credit Reports

Before your child turns 18, it’s essential to check their credit for any history of use. Some fraudsters can mask themselves under the guise of your child’s name to open accounts or take out enormous loans, as reported in PR Newswire. You should monitor your child’s credit and ensure all the information is accurate and up-to-date. Once they turn 18, they must check their credit reports at least once a year to ensure no discrepancies.

Set Off Your Child Towards Financial Freedom

Financial literacy is the key to financial freedom. Without understanding the modern monetary system, your child is at great risk of sinking into debts and other catastrophic financial liabilities. Help them set off to a great start with the help of First National Bank of Oklahoma. Contact us today to learn more about our financial solutions and how you can help your children start building a solid credit background.

The post At What Age Can You Start Building Credit? appeared first on First National Bank of Oklahoma.

This blog post will explore the ins and outs of manufacturing loans and how they can be used to grow your business. We will delve into the different types of business loans available for manufacturers and the various financing options in the market. 

Keep reading to understand better how a manufacturing business loan can be a valuable tool for taking your business to the next level.

What Is a Manufacturing Loan?

According to the Federal Financial Institutions Examination Council, business or commercial loans are a common type of loan provided to business enterprises involved in commercial or industrial activities, including sole proprietorships, partnerships, or corporations. 

Manufacturing business loans, also known as commercial loans or C&I loans, play a significant role in providing businesses with the financial resources needed to grow and succeed. As highlighted by the Federal Reserve Bank of San Francisco, these types of loans are crucial for the banking industry and represent a fundamental source of funding for the business sector. 

Whether you want to purchase new equipment, expand your operations, or hire additional staff, a manufacturing loan can help make your goals a reality. As a manufacturer, a commercial loan can be a useful tool to help finance your business ventures and maintain a steady cash flow. 

It’s important to understand the different types of manufacturing business loans available and the associated repayment terms and interest rates to decide when selecting a loan that best fits your business needs.

Types of Business Loans for Manufacturing 

Manufacturing businesses can access various loan options to obtain the necessary capital to start, expand, or grow their operations. One such option is an SBA loan, a lending program administered by the U.S. Small Business Administration. According to the SBA, their lending and investment offerings have given manufacturers over $5 billion in capital. SBA loans may offer more favorable terms than traditional commercial loans, making them a popular choice among manufacturers.

Rural manufacturers may also benefit from a USDA guaranteed loan. These loans are available to manufacturers located in rural areas, and like SBA loans can offer more favorable terms than other financing options. USDA guaranteed loans must be collateral secured and can be larger than SBA loans, with loan limits up to $25 million. To see if your business qualifies as rural, check out First National Bank of Oklahoma’s mapping tool here. 

Equipment financing bank loans are another popular option available to manufacturers. As stated by the U.S. Chamber of Commerce, this loan is often used to upgrade or replace outdated machinery, increase production capacity, or improve production efficiency. 

As per Business News Daily, invoice financing or “factoring” is a loan option that allows manufacturers to sell their unpaid invoices to a lender in exchange for immediate cash. This type of loan is particularly useful for manufacturers that operate on a tight budget or have cash flow constraints. First National Bank of Oklahoma does not typically offer this sort of financing. 

How Can I Use a Manufacturing Business Loan?

If you’re wondering how to use a manufacturing business loan, the Small Business Administration (SBA) provides a comprehensive list of options to help you determine how to allocate your funds. One popular use of a manufacturing business loan is to purchase and upgrade equipment. With new equipment, you can improve production efficiency, reduce costs, and increase output capacity, ultimately leading to higher revenue.

Another way to use a manufacturing business loan is to expand or renovate facilities. If you need additional space, a business loan can help you cover the cost of construction or leasing, providing you with a larger production area. 

Moreover, a manufacturing loan can also be employed to procure inventory, execute improvement strategies, devise management plans for your workforce, explore international markets, and research innovative manufacturing processes. 

What Financing Options Are Available for Manufactures? 

When it comes to financing options for manufacturers, there are various alternatives available aside from the types that have been previously mentioned. Investopedia notes that certain financial institutions or banks provide renewable loans that can be extended without limit, providing a flexible and ongoing source of funding for manufacturers.

Further, Manufacturing.net emphasizes that manufacturers may consider term loans as an alternative financing option with interest rates that fluctuate based on credit, term, and funding timeframe. Although the requirement for collateral may vary based on the lender and their creditworthiness, personal guarantees are usually necessary.

Grow Your Manufacturing Business With Financing

A manufacturing business loan can give you the necessary capital to grow and expand your business. There are various ways to utilize these funds, from purchasing equipment to exporting to international markets. It’s important to research different financing options to find the best fit for your needs. 

Contact First National Bank of Oklahoma today to explore financing options that can help your manufacturing business grow and thrive.

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