Experiencing tough times? Look to Alternative Lending options
January 27, 2021
they are dairymen, crop farmers, livestock producers or agribusiness
operations, most borrowers go to their bank once a year to renew their
operating lines for the upcoming season.
Most years this process comes off without any major hitches. But what happens if they experienced losses
for the past season or maybe a couple of seasons? Now the process becomes more difficult. The
bank who is providing operating financing is now unwilling to move forward
without some serious changes being made. ... Continue reading
FOCUS ON WORKING CAPITAL AND COST CONTAINMENT IN THE NEW YEAR
November 06, 2020
farmers made money the old-fashioned way — from operations — in 2020, while
others showed profit from the consequences of this strange year.
payments through programs like the Coronavirus Food Assistance Program (CFAP) could
mask underlying issues within farm businesses and have implications for ag
lending and farm balance sheets into the new year. Here are four things to
watch as we move into the new year, namely some strategies and tactics to help ensure
your operation rema... Continue reading
New farm diversification opportunities could help sustain long-term revenue and viability.
You Never Get a Second Chance to Make a First Impression
November 05, 2020
have all heard the expression “You Never Get a Second Change to Make a First
Impression.” It has been attributed to Oscar Wilde and Will Rogers, although
nobody really knows for sure. Studies
show a person will form their first impression somewhere between seven seconds
and two minutes.
few ways mentioned to achieve this are:
Be PreparedBe on TimeBe AwareBe PositiveBe SelflessBe an OriginalPresent Yourself with AuthorityHave a Winning SmileBe Courtesy and Attentive...an... Continue reading
DON’T GET DISTRACTED BY WHAT YOU CAN’T CONTROL
October 19, 2020
its many production and marketing variables, agriculture is a volatile
marketplace and has been for decades. That’s no surprise to farmers, ranchers
and others in agribusiness who have weathered past cycles…including the
experienced ag lenders and finance specialists at Conterra Ag Capital.
now, that volatility has never been greater. It’s causing some of the world’s
largest financial institutions to re-examine industry investment positions and
financing of even some of the la... Continue reading
Focus your energy on risk management, other farm-level strategies
Interest Rates – When do I Pull the Trigger?
September 21, 2020
likes to talk about interest rates, especially when considering borrowing
money. If it is for a home mortgage or a
refinance of a farming operation, the conversation is usually about the same. When is the best time to lock-in an interest
rate? The short answer is: when they are
lowest … right?
starts the discussion as to how do I know when rates are the lowest? This is where it gets complicated, as lending
sources are likely working off rate diff... Continue reading
Tips to Improving Your Long-Term Financing Position
August 13, 2020
some point in your ag business career you are likely to seek long-term
financing for your operation. Reasons
may vary from purchase money to refinance existing debt to
freeing up working capital. Whatever the reason, the process is very similar. Your term long-lender may be different from
your bank in many ways, but the one thing that is very similar is the need for
quality financial information. Keep in
mind you are likely a new customer to your long-term lender. They do not have
the borrowing histo... Continue reading
Passing the Torch – Don’t Get Burned
July 14, 2020
term Succession Planning is not new to those in the business of
agriculture. While an important part of
any operation, many farmers and ranchers fail to pay close attention to the process. Succession planning requires considerable
upfront preparation and plan maintenance to keep moving in a productive
direction. Many resources are available,
as this issue is important to any type of business, especially when adult
children are brought into the business.
not... Continue reading
Is it a Good Idea to Use More Than One Ag Lender?
June 22, 2020
Ag lending has evolved in how ag credit is delivered and who
is delivering that credit. Both
agricultural operations and institutions that lend into agriculture have seen
dramatic consolidation. The number of ag lending institutions have dwindled
considerably in the last 20 years.
Often farmers and ranchers who have experienced stress and may
need some sort of restructure have been asked by their lender to find other financing.
Borrowers frequently question if it would be good consolidation to have all farm
debt with one... Continue reading
AGRICULTURAL LENDING IN A POST-PANDEMIC WORLD
June 22, 2020
like so much in our lives, the agricultural lending sector will see a lot of
change — some of it permanent — as society resumes what becomes the new normal
coming out of the COVID-19 pandemic.
pandemic has caused many financial operations to slow considerably or stop
altogether as stay-at-home orders and other necessary measures were implemented
to help prevent the virus from spreading. Appraisers weren’t able to travel to
properties to do their jobs, and some insurance companies were unable to write
policies an... Continue reading
3 Steps to Rising Above Farm Financial Strain
June 09, 2020
Three-step process helps
ensure long-term financial viability for farms and ranches.
all alternative ag lenders are created equal. Alternative lending is something
of a catch-all for institutions that use non-traditional strategies and
mechanisms to help farmers and ranchers cover their financial obligations to
sustain their operations. Some of those strategies can actually cause more
strain in the long term while others are more geared toward continued financial
viability well into the f... Continue reading
ALTERNATIVE LENDING FOR THE LONG TERM
Planting Season Tips from an Ag Lender
June 03, 2020
Every spring there’s a sea of tractors out planting the fall
crop. During this time there is usually
one thing on a farmer’s mind: getting the crop out on time. Although, this is the perfect time for
farmers to be thinking ahead on how they can help their lender. How you may wonder? Let’s discuss a few
things to do during planting season that will proactively help you and your ag lender.
1.  ... Continue reading
Conversations with your Ag Lender: 3 Key Components of Financial Analysis
May 20, 2020
ranchers across the United States have felt the pressure of declining margins
over the past few years. With declining margins, proactive conversations with
your ag lender become essential for the financial health of any operation.
Conversations about annual projections, capital purchases, debt structure, and
operating expenses should happen early in the year to allow time for adequate
financial planning. At times these
conversations can feel overwhelming yet having the right tools in place and
understand... Continue reading
INFORMATION TO SECURE A REAL ESTATE LOAN -Why So Much?
April 21, 2020
question from borrowers, especially first-time borrowers, is why the lender
needs so much information? It may seem
like a lot and somewhat unnecessary from the borrower’s perspective, but the
lender wouldn’t be asking if the information wasn’t critical somewhere in the
application, approval, documentation or closing process. Everybody answers to someone, lenders
included, so proper analysis and documentation is paramount for the borrower’s
protection as well as the lender’s.
LET’S TAKE THE MYSTERY OUT OF THIS.
SGMA through the Lens of an Agricultural Lender
April 21, 2020
water supplies and weather conditions in California lack predictability. Over
time the snowpack in the Sierra Nevada mountain range has shown a boom and bust
pattern. The one constant historically relied upon by agricultural operations,
and those financing them, was groundwater, either as a primary or supplemental
supply. Entire operations may have depended on 100 percent groundwater, and
that method was not considered high-risk.
SUSTAINING THE AG SUPPLY CHAIN THROUGH CRISIS
April 13, 2020
and ranchers aren’t immune to the angst surrounding the rapidly evolving
COVID-19 pandemic and the protective measures intended to prevent the virus’
spread. But “social distancing” is nothing new for many people in agriculture
given the nature of the day-to-day work of operating a farm or ranch. Farmers,
ranchers and agricultural workers are doing everything they can to maintain
life and work as “normal.” It’s easier to socially distance in rural America.
Farmers, ranchers and agribusinesses rise to the COVID-19 challenge.
What to Expect with the Loan Process During the COVID-19 Pandemic
April 06, 2020
lenders have in place Business Continuity Plans, but COVID-19 has put them to
the test, with varying results. With
many states enacting stay at home orders to protect the health of their
residents, what remains for many lenders is to move off-site the support
functions, consistent with their Business Continuity Plan.
said, loan-making involves the application and supporting financial information
flowing in a timely and secure manner, much of which is dependent on th... Continue reading
Protecting your operation in these uncertain times
April 06, 2020
With COVID-19 causing disruptions
throughout the US economy, farmers and ranchers are experiencing a wide range
of side effects. While parts of Rural
America have some insulation, certain sectors and areas have seen greater
impacts. Low oil prices and reduced
demand for fuel, as travel has slowed, is wreaking havoc on the ethanol
industry, which has a trickle-down effect on corn prices in areas supported by
ethanol production. Operating on tight
margins, many farmers rely on off-... Continue reading
TIME TO REFINANCE YOUR AG LOANS?
March 25, 2020
economic times often create financial opportunities. The Federal Reserve recently
lowered the federal funds rate to near zero and eliminated reserve requirements,
as it seeks to stimulate the economy and eliminate bank liquidity concerns as
recession looms. Reassessing our farm
and personal financial positions, specifically our debt structures and costs,
must be a fundamental response to the rapidly changing economic environment. But
does a lower funds rate mean you will benefit from refinancing assets lik... Continue reading
Consider cash flow needs, long-term financial consistency
FINANCING NUT CROPS. WHAT IS THE LENDER’S APPROACH?
February 26, 2020
Nut crops favor
very warm climates, and this climate limitation concentrates most of the
production to the far western states.
There are commonalities among the various nut crops, but there are also
come big differences.
Let’s explore what
a real estate lender might be looking for when considering a loan request for
collateral containing nut crops:
Locatio... Continue reading
3 THINGS TO THINK ABOUT IN OVERCOMING CURRENT DAIRY INDUSTRY CHALLENGES
February 24, 2020
in the U.S. dairy industry have been through well-documented struggles in
recent years. Some say dairy industry challenges are causing massive structural
changes and edging out family farmers. Multigenerational dairy farms are indeed
shuttering around the country as consolidation and market pressure force
difficult and sometimes painful decisions when further expansion or
diversification aren’t viable options. Whether it’s a natural evolution of the
dairy marketplace or a consequence of industry changes, it’s a painf... Continue reading
Family dairy farmers face an uphill climb but have options to build efficiency