As a farm owner, you work hard to maintain your farm, which means its success is important not only to you personally, but your family’s livelihood. If you also employ a team of people, having a successful farm is also important to them and their families as well. That’s why when it’s time to grow or expand your operations, you want to work with the right lender who you can trust to get the job done. Not only do you want to work with a banker who is sensitive to the ups and downs that come with managing crops, but you want someone who understands your industry. Luckily there are seasoned bankers out there who specialize in farm lending and can help you with your needs. To find the right lender, follow these tips.
Start at the Bank
To start, the first thing you should do is visit a couple different banks in your area to see what type of farm loans they offer. Most mid-to-large banks have different departments for different lending needs, which can also include agricultural lending. This is especially true if you live in a large farming community. When you visit your local banks, ask the managers what their lenders are and where they have the most expertise. If you talk with a bank that only specializes in commercial and industrial (C&I) lending, they may not have the expertise that you need for your loan. You should also ask what their maximum lending limit is to individual customers to see if they can fulfill your request. Farm equipment is expensive, and if you find that their limits just don’t fit within your lending needs, then you may have to look elsewhere. If, however, they have the right expertise and their lending limits are within your needs, then you should make an appointment to meet with a lender to go over your request.
Meet with Your Lender
All successful business transactions are built on good relationships, and if you don’t have a good relationship with your lender then it can make securing the financing you need quite difficult. It’s important to meet with your potential lender to go over your business needs and expectations. A good lender should offer open communication and be attentive when you’re talking about your business. They should ask questions, offer suggestions, and provide advice when needed to help your farm be a success. Ask what their response time is to inquiries. Everybody wants to have a personal life, but if it takes days for a lender to get back to you when you have a question, they may not be the right fit for your needs, especially when you’re working in a volatile industry such as agriculture where a quick response is often vital.
If you have a network of other professional farmers you regularly communicate with, it’s always a good idea to reach out to them to see if they have any recommendations for reputable lenders in your area that would be a good fit for your agricultural loan needs. Reputation is important and a bad one will spread quickly, so you should be able to get an immediate sense of which banks and lenders would be a potential good fit and which ones you should steer clear of. You can also research banks and lenders on the internet to see what other people outside your industry are saying about them and what pros and cons you should be aware of before you move forward with a loan commitment.
At the end of the day, finding the right lender is about knowing your needs, weighing the potential risks of choosing one bank over another, and connecting with a lender who has a thorough understanding of your needs and is willing to work with you. If you can find that, securing a loan for your farm should be easy.