When researching farm loans, it’s important to find an ag lender who is knowledgeable about your specific type of operation and the challenges you face. One of the most important ways to evaluate potential lenders is by asking the right questions.
Here are some key questions to ask when speaking to potential ag lenders:
1. What is your experience in lending to farmers and ranchers? Find a lender who has experience working with the agricultural industry and who understands the specific challenges and opportunities that producers face.
2. What is your lending philosophy? It stands to reason that different lenders have different approaches to lending. Some may focus more on financial metrics, while others may take a more holistic approach that considers your overall farm operation, history, and long-term goals.
3. How do you work with clients? It’s important to find a lender who is willing to take the time to understand your specific needs and goals, and who can provide personalized guidance and support throughout the lending process.
4. What types of financing options do you offer? Different ag lenders may offer a variety of financing options, so it’s important to find one that offers the types of financing that are most appropriate for your operation. Are you looking for a long-term mortgage, short-term development financing, or an annual crop operating loan?
5. What is your knowledge of the agricultural industry in my region? Working with an ag lender who is familiar with the specific environmental and economic factors that can impact your business in your region can be a valuable asset.
6. How do you evaluate loan applications? Understanding the lender’s rating criteria for evaluating applications can help you better prepare and improve your chances of approval. Some lenders may require additional information when reviewing your loan application, and it’s best to be organized and avoid surprises.
7. What are the terms and conditions of your loans? You’ll want to understand the interest rates, repayment terms, and any fees or charges associated with the loan before accepting any offer. Also, consider if the lender is flexible with their terms – for example, are payment dates flexible to work with your cash flow needs?
Asking the right questions when speaking with potential ag lenders can help you find a lender who is knowledgeable about your type of operation and the challenges and opportunities you face. By asking a number of detailed questions, you can weigh your options and make an informed decision.
Conterra Ag Capital is a private lender, focused solely on American agriculture. Whether you’re a small-scale grower or a large commercial operation, Conterra has a variety of loan options available to producers across the country. Regional relationship managers are available to answer your questions, find your Conterra contact here.