Call it asset-light. Consider risk management. Recognize the changing landscape of multi-generation farms in transition and an influx of beginning farmers.
FarmOp Capital formed eight years ago with the idea that modern agriculture was facing funding challenges that no longer fit the conventional financing box. Today the company announced a $250 million partnership with Carlyle, a global investment firm.
This partnership was led by Carlyle Asset-Backed Finance, a group within Carlyle’s Global Credit platform focused on private fixed income and asset-backed investments. Carlyle ABF has deployed approximately $8 billion since 2021 and has approximately $9 billion in assets under management as of March 31, 2025.
Carlyle and FarmOp leaders said the partnership adds depth to the FarmOp coffers, extending its financial reach for meeting those on-farm needs. This partnership, leaders said, enables FarmOp to increase its origination capacity and expand capital access for independent row crop farmers across the U.S.
Akhil Bansal, head of asset-backed finance at Carlyle, explained further: “This partnership does expand access to capital, but with strong structural protections in place. Each loan is secured by insured crops and governed by milestone-based draw schedules and strict oversight. It is a highly controlled form of credit, designed to meet borrower needs without compromising on underwriting standards.”
Essentially, FarmOp’s lending model for production loans to farmers is no longer strictly land-based, CEO Keir Renick said the financial agreement is grounded in the crop asset and certain required risk management elements, including crop insurance.
With farmers on average renting more than 50% of the farmland they work, Renick said the traditional lending model limits the operation’s borrowing ability and farmers too often have operating loans that don’t meet their needs.
“As a private lender,” he said, “FarmOp has ‘the ability to expand the credit box’ beyond what traditional banks offer.”
To do that, FarmOp focuses on production-based lending rather than traditional balance sheet metrics, providing farmers with longer loan terms and higher advance rates that align with actual crop cycles. This lending model also addresses a rapidly changing farm leadership landscape.
With over 30% of farmers 65 and over, Renick noted that succession planning is driving significant transitions. “Think of a family that has three kids. If all the kids want to farm, you've got to expand the farm,” Renick said. That dynamic triggered a large rental economy and an expanding farm model.
"You've got a bigger farmer and more rented land," Renick said. Then, he asked: "How does that work as a farmer moves into an asset-light model?"
Breaking traditional lending barriers
Traditional agricultural lending has been "driven off a methodology that is balance-sheet centric," driven by land ownership as the essential asset.
Renick says the conventional lending cycle creates cash flow challenges for farmers:
- Loans typically come due in December.
- Limited capital prevents strategic purchasing.
- Cash flow needs limit strategic marketing opportunities.
FarmOp's solution
FarmOp "designed the debt product to bank individual crops cycles at a higher advance rate with a longer term," allowing farmers to access value opportunities they previously couldn't reach. Their approach involves:
- underwriting contracts that back up the crop
- including crop insurance premiums in the loan funding and requirements
- funding at levels that strengthen a farmer’s financial position year-round
Improved funding levels, Renick said, create opportunities for farmers to "buy inputs in-season for the next year and hold grain to get a basis bump.”
Technology-driven risk management
FarmOp loans are soaked in risk management, with underwriting focused on "crop-level economics, including insurance coverage, marketing plans, and production expectations, rather than relying solely on borrower balance sheets."
The company also helps farmers analyze how insurance elections affect loan terms: "If they take their crop election from 70% to 85%, they can see what it does to our loan amount and our interest rate." Additionally, FarmOp includes crop insurance premiums and hedging costs in their loans.
“At Carlyle, we recognize the critical role that working capital plays in sustaining independent U.S. farmers,” said Gregory Gudis, a principal on Carlyle’s Asset-Backed Finance team. “Through this partnership, we’re proud to expand access to flexible financing for growers who have historically lacked suitable credit options.”
Ultimately, Carlyle’s Bansal said, the company sees long-term success in the farm sector, despite the current economic downturn.
“We focus on sectors with high-quality collateral, predictable cash flows, and resiliency in periods of economic stress where we can support originators with scalable capital solutions,” Bansal said. “Agriculture is a critical sector with persistent capital needs, regardless of short-term market conditions.”