A Conversation with Your Ag Lender
When researching crop operating loans, you should ask your ag lender these questions before applying. Understanding what your ag lender is offering is key to make informed decisions and to secure the best possible loan terms that align with the specific needs and financial circumstances of your operation.
Conterra Relationship Manger Tim Jett answers the 8 best questions about crop operating loans. Tim works with Conterra clients throughout the Delta Region and is familiar with the cycles of agriculture and how operating loans answer the annual financing needs of American producers.
1. What types of crop operating loans do you offer, and what are the terms and interest rates?
Knowing the types of crop operating loans offered as well as terms and interest rates helps farmers compare different options and select the most suitable operating loans for their specific needs and financial situation.
Conterra crop operating loans provide financing for up to 90% of a borrower’s crop insurance guarantee. Our interest rates are market and borrower dependent, and Conterra operating lines are non-revolving requiring annual renewal.
2. How much can I borrow and how is that amount determined?
Understanding the borrowing limits and how the loan amount is determined allows farmers to gauge the financial support available and plan their farming activities accordingly.
Conterra crop operating loan size is dependent on crop insurance guarantee and borrower size. We will work with each producer to review their crop insurance coverage and financial position to come up with a loan that fits their financing needs.
3. What documents and information do I need to provide to apply for a crop operating loan?
Learning about the necessary documents and information for the loan application ensures that you come prepared with all the required paperwork, streamlining the application process, and reducing delays.
Applicants for Conterra operating loans should prepare limited historical production information, crop insurance estimates and operating budget for application year. Applicants will also need to provide a financial package that includes a balance sheet and three years of taxes.
4. How long does the application process take, and when can I expect to receive a decision on my loan?
Understanding the timeline for the application process and loan decision helps farmers plan their finances and farming activities accordingly.
While application processing times vary, the average decision comes within 3-5 business days.
5. What happens if my crops are damaged or lost due to weather or other unforeseen circumstances?
Inquiring about procedures in case of crop damage or loss due to unforeseen circumstances ensures you understand how the lender handles such situations and how they may impact the loan terms.
Conterra requires operating loan borrowers to have adequate crop insurance coverage for adverse events. If there is an insurance claim, we work with the borrower and their insurance agent to understand the extent of the loss and the level of the claim. This allows Conterra and the borrower to decide the best use of the insurance proceeds.
6. Are there any fees associated with taking out a crop operating loan, and if so, what are they?
Knowing about any fees associated with taking out a crop operating loan allows you to assess the total cost of the loan and make informed financial decisions.
Conterra values our long-term relationships with our clients and recognizes the importance of simple and straight-forward lending. We do not charge penalty fees for not using credit lines or for making draws.
7. How can I use the funds from a crop operating loan, and are there any restrictions on how the money can be used?
Understanding how funds from the crop operating loan can be used and any restrictions helps you align the loan with your operation’s needs.
Conterra operating loan funds are to be utilized for production/operating expenses based on the approved crop budget, such as: seed, fertilizer, pesticides, and other inputs, general operating expenses, or land rent.
9. Do you offer any other financial resources or programs to farmers or ranchers?
Inquiring about available resources and programs for financial support provides farmers with opportunities to access additional assistance or benefits that may contribute to the success of their farming operations.
Yes, Conterra offers a variety of agricultural loans designed to meet the needs of farmers, ranchers, and rural landowners. In addition to operating loans, we offer an industry-leading variety of highly competitive ag real estate products: conventional and alternative financing, development loans, agribusiness loans, revolving lines of credit, and partner crop insurance program.
By asking these questions, you can make an informed decision, clarify any doubts, and be well-prepared for the loan application process. This proactive approach to understanding what to ask and why strengthens your financial position and enables you to determine if the operating loan option is a fit for your operation’s specific needs.
Conterra Ag Capital is a private agricultural lender, focused solely on agriculture. Conterra offers flexible terms on crop operating loans. Your Conterra regional loan officer is available to answer your questions. Find your Conterra relationship manager here.
Disclaimer: Please note that the information provided in this article is for educational and informational purposes only, and should not be construed as financial or investment advice. While we have made every effort to ensure the accuracy and reliability of the information presented, Conterra Ag Capital and its affiliates make no representation or warranty as to the completeness, correctness, timeliness, suitability, or validity of any information contained in this article. You should always consult a qualified financial advisor, tax professional, or other qualified professional for advice on your specific financial situation.