This paper aims to examine weather farms using income-increase earnings management to obtain bank loans and investigate the relation of the degree of earnings management and farm’s borrowing capability. We adopt four existed earnings management models to check if the farms involve earnings management behavior: Jones model, Modified Jones model, Cash-Flow model and Performance-Matching model. Using data from the Farm Accountancy Data Network (FADN) database from 2000 to 2019, we show the result that farms increase their profitability through accruals earnings management before they apply to a bank loan. A dynamic least squares models is also applied to study if farms increase their borrowing capacity through earnings management. The results indicate that as farms increase their earnings management, their ability to borrow also increases. These implications should be taken in to account by banks. This study also extends a growing research stream on the relationship between borrowing capability and earnings management for agribusinesses.