If you need money to fund a business expansion, include your account manager in the planning process. Your chance of approval is better that way

Your account manager wants repayment to be as easy as possible for you. Let them know when would be the best time for your cash flow, and the account manager can make that happen.

Here’s a common scenario: A farm couple uses their accountant and lawyer as resources when making decisions to expand the business. They formulate a plan based on their goals, and then take that plan to their account manager for the financing request. The account manager reviews the application for financing and decides whether or not it’s a feasible plan and whether the financial institution will invest in it.

This scenario happens for the vast majority of financing applications and it’s completely backwards to how it should be.

Your account manager is an extremely valuable resource, providing a professional opinion on debt structure and farm growth. Your account manager can, with analysis, see areas were your farm is suffering and areas were it is able to support some growth.

As a simple example, maybe your farm has a little too much debt due in the coming year, but your equipment loans are well paid down. You had to rebuild an engine in a tractor and you paid for it out of a line of credit. That kind of thing can make it appear that you’re suffering and are going to have a hard time making your payments in the coming year, much less operate. Your account manager can see at a glance that there is room to move debt around to make it much easier to operate.

Never be afraid to talk to your lender. If you know that you are going to have a hard time making a payment, it is far better to make the call and open communication than have the lender assume the worst and chase you. I know that’s easier said than done, but communication is vital to any good relationship.

ASK FOR FLEXIBLE REPAYMENT

Next time you apply for financing, think about what repayment schedule will suit your farm operation the best. You know when you market your product. Request that your payments be timed accordingly. Your account manager wants repayment to be as easy as possible for you. Let them know when would be the best time for your cash flow, and the account manager can make that happen.

If a loan is already in place and you want to change the way you market, say changing when you market you calves, request that your payment date be changed so that it’s due when you have animals to sell.

Most importantly, choose an account manager who you can get along with. If you find that your personalities don’t jive, then it may be time to make a switch. It’s important that you understand I’m not talking about bad blood due to a loan request being turned down. I’m talking on a much broader scale about vision of agriculture and your hopes and dreams for the future.

An ongoing relationship with your account manager at your financial institution can help your farm progress in ways only previously dreamed of.

— Robin Christian Blythe farms near Kenville, Man., and is an account manager at a local financial institution. She has a diploma in agriculture from the University of Manitoba.

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