BUSINESS LOAN AGREEMENT

Principal - $2,500,000.00  Loan Date - 04/25/2003  Maturity 02/28/2004

Loan No. -  70290



References in the shaded area are for Lender's use only and do not limit

the applicability of this document to any particular loan or item.

Any item above containing "***" has been omitted due to text length

limitations.



Borrower: ART'S-WAY MANUFACTURING CO., INC.

(TIN: 42-0920725)

HWY 9 WEST, PO BOX 288

ARMSTRONG, IA 50514-0288



Lender:   WEST DES MOINES STATE BANK

MAIN BANK

1601 22ND STREET

WEST DES MOINES, IA 50266

(515) 222-2300



THIS BUSINESS LOAN AGREEMENT dated April 25, 2003, is made and executed

between ART'S-WAY MANUFACTURING CO., INC. ("Borrower") and WEST DES

MOINES STATE BANK ("Lender") on the following terms and conditions.

Borrower has received prior commercial loans from Lender or has applied

to Lender for a commercial loan or loans or other financial accommodations,

including those which may be described on any exhibit or schedule attached

to this Agreement ("Loan").  Borrower understands and agrees that:

(A) in granting, renewing, or extending any Loan, Lender is relying upon

Borrower's representations, warranties, and agreements as set forth in

this Agreement; (B) the granting, renewing, or extending of any Loan by

Lender at all times shall be subject to Lender's sole judgment and

discretion; and (C) all such Loans shall be and remain subject to the

terms and conditions of this Agreement.



TERM.  This Agreement shall be effective as of April 25, 2003, and

shall continue in full force and effect until such time as all of

Borrower's Loans in favor of Lender have been paid in full, including

principal, interest, costs, expenses, attorneys' fees, and other fees

and charges, or until such time as the parties may agree in writing

to terminate this Agreement.



CONDITIONS PRECEDENT TO EACH ADVANCE.  Lender's obligation to make the

initial Advance and each subsequent Advance under this Agreement shall

be subject to the fulfillment to Lender's satisfaction of all of the

conditions set forth in this Agreement and in the Related Documents.



Loan Documents.  Borrower shall provide to Lender the following

documents for the Loan: (1) the Note; (2) Security Agreements granting

to Lender security interests in the Collateral; (3) financing statements

and all other documents perfecting Lender's Security Interests;

(4) evidence of insurance as required below; (5) guaranties;

(6) together with all such Related Documents as Lender may require

for the Loan; all in form and substance satisfactory to Lender and

Lender's counsel.



Borrower's Authorization.  Borrower shall have provided in form and

substance satisfactory to Lender properly certified resolutions, duly

authorizing the execution and delivery of this Agreement, the Note

and the Related Documents.  In addition, Borrower shall have provided

such other resolutions, authorizations, documents and instruments as

Lender or its counsel, may require.



Payment of Fees and Expenses.  Borrower shall have paid to Lender

all fees, charges, and other expenses which are then due and payable

as specified in this Agreement or any Related Document.



Representations and Warranties.  The representations and warranties

set forth in this Agreement, in the Related Documents, and in any

document or certificate delivered to Lender under this Agreement

are true and correct.



No Event of Default.  There shall not exist at the time of any Advance

a condition which would constitute an Event of Default under this

Agreement or under any Related Document.



REPRESENTATIONS AND WARRANTIES.  Borrower represents and warrants

to Lender, as of the date of this Agreement, as of the date of each

disbursement of loan proceeds, as of the date of any renewal, extension

or modification of any Loan, and at all times any Indebtedness exists:

Organization.  Borrower is a corporation for profit which is, and at

all times shall be, duly organized, validly existing, and in good standing

under and by virtue of the laws of the State of Iowa.  Borrower is duly

authorized to transact business in all other states in which Borrower

is doing business, having obtained all necessary filings, governmental

licenses and approvals for each state in which Borrower is doing business.

Specifically, Borrower is, and at all times shall be, duly qualified as

a foreign corporation in all states in which the failure to so qualify

would have a material adverse effect on its business or financial condition.

Borrower has the full power and authority to own its properties and to

transact the business in which it is presently engaged or presently proposes

to engage.  Borrower maintains an office at HWY 9 WEST, PO BOX 288,

ARMSTRONG, IA 50514-0288.  Unless Borrower has designated otherwise in

writing, the principal office is the office at which Borrower keeps its

books and records including its records concerning the Collateral.

Borrower will notify Lender prior to any change in the location of

Borrower's state of organization or any change in Borrower's name.

Borrower shall do all things necessary to preserve and to keep in full

force and effect its existence, rights and privileges, and shall comply

with all regulations, rules, ordinances, statutes, orders and decrees of

any governmental or quasi-governmental authority or court applicable to

Borrower and Borrower's business activities.



Assumed Business Names.  Borrower has filed or recorded all documents

or filings required by law relating to all assumed business names used

by Borrower.  Excluding the name of Borrower, the following is a complete

list of all assumed business names under which Borrower does business:

None.

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