How Ag Lenders Support Flood-Impacted Farmers
Access to flexible rural capital can be a major challenge when impacted by farm floods. Floods can damage crops, equipment, buildings, and infrastructure, leaving operations with significant repair and rebuilding costs. These unexpected costs can be overwhelming. However, ag lenders can play a critical role in helping producers recover from floods by providing access to the capital needed to repair and rebuild.
One of the first steps in securing capital is to understand the extent of the damage caused by the flooding. Farmers should work with a professional to assess the damage and estimate the total cost of repairs. This information can then be used to develop a plan to secure the necessary capital.
“Unforeseen challenges and unexpected events are an inherent part of farming,” stated Darren Anderson, Conterra relationship manager for the Eastern Cornbelt. “Developing a solid contingency plan and partnering with a flexible and innovative lender like Conterra can greatly assist in effective managing these hurdles and navigating through difficult times.”
Flexible Capital for Farm Flood Recovery
Ag lenders can offer a variety of loan products to help farmers recover. Conventional farm and ranch loans can provide the capital needed to repair or replace damaged equipment and infrastructure. These loans are typically secured by the assets being financed, such as land or equipment, and may require a down payment or collateral.
Natural disasters can disrupt cash flow by disrupting production, delaying harvests, and impacting market access. Flexible capital can help bridge gaps in cash flow, cover operating expenses, and ensure continuity of operations during the recovery period.
In addition to conventional lending products, alternative ag lending can also provide access to financing for farmers. Alternative lending options may include distressed lending, where lenders work with farmers who are facing financial difficulties, and bridge loans, which provide short-term financing to cover immediate needs.
“I have worked through multiple disasters throughout my years of experience,” continued Anderson. “My goal in these situations is to be more than just a lender – I strive to be a trusted partner in recovery.”
When working with an ag lender, farmers should be prepared to provide detailed financial information, including cash flow projections, to demonstrate their ability to repay the loan. The lender will also assess the farmer’s credit history and collateral to determine the level of risk associated with the loan.
Additionally, proactive risk management strategies are essential for mitigating impact. Farmers can access risk management tools such as crop insurance, revenue protection programs, and disaster recovery loans to minimize financial losses and protect against future disasters.
It’s important for producers to work with experts who understands the specific challenges of the agricultural industry, including unexpected natural disasters, and can provide customized solutions to meet their needs. A lender who specialized in agricultural lending will be able to provide valuable insights and resources to help farmers navigate the recovery process and get back to work quickly.
Access to capital is critical for farmers recovering from floods and natural disasters. Ag lenders can provide the flexible financing needed to repair and rebuild, ensuring that farmers are able to get back to work quickly. Conventional farm and ranch loans, alternative ag lending, and distressed lending options can all provide access to capital for farmers in need. By working with a lender who understands the cycles of the agricultural industry, farmers can develop a customized plan to secure the capital needed when disaster strikes.
Conterra Ag Capital focuses exclusively on agriculture, providing traditional farm and ranch loans, development and alternative lending to America’s farmers, ranchers and agribusiness. With relationship managers located across the country, we have the flexible capital needed to recover from farm floods and throughout the cycles of agriculture. As a private lender, Conterra has flexible farm loan programs available to meet the needs of producers.
