Financing of timberland tracts typically will be tied to the borrower’s repayment capacity whether from:

• sale of stumpage
• resale of land parcels
• income from other sources
• combination of all three

Down payments depend on the financial strength of the borrower, usually 25% but that can vary either way. Interest rates can be variable or fixed.

Financing requires a real estate appraisal of the property which may include a timber cruise (or audit of existing timber inventory) performed by a qualified forester. This cruise/audit will normally be done on larger tracts and those relying primarily on stumpage for repayment performance.

Timber tracts can have straight 10-25 year amortizations with monthly/quarterly/semi or annual payments; interest may be required more frequently. Loans are also available based on harvesting stumpage as long as a harvest/cutting plan is in place with monthly cutting reports and stumpage payments being applied to principal. Revolving lines of credit may be available depending upon the borrower’s financial strength.

These loans are available for both the professional logger/land owner and those who want to own these tracts more for recreational and residential use (both primary and non-primary homes).

Similar financing options are available for multiple use parcels where the forest component is only part of the asset with other land categories such as open fields or orchards consisting of the balance. Such parcels are often purchased as general real estate investments where personal use (at times in association with a house on premises) often drives ownership goals with forestry as a soft investment attribute.

Some financing options can be obtained at the Related Links tab located at the Home Page of this web site. Additional financing options are available at local and national lending institutions.