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Tips For Farmers When Working With Lenders By Benedict T. Palen, Jr.

Fifth, even if you have been with one lender for a long time, look around, and have a Plan B in case things do not pan out with the current lender. <br>

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Tips For Farmers When Working With Lenders By Benedict T. Palen, Jr.

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  1. Tips For Farmers When Working With Lenders By Benedict T. Palen, Jr. There are signs everywhere in the farm sector that credit availability is tightening for 2019, and that lenders will exert extra scrutiny of many loan applications, whether for renewals, or new financing.  What can a farmer do to be prepared? The first and foremost thing is to be proactive, and upfront with the lender.   This will give you, the borrower, the opportunity to frame the discussion, rather than being on the defensive from the get go.

  2. Tips For Farmers When Working With Lenders By Benedict T. Palen, Jr. Second, be organized, detailed, accurate, and prepared.  Have your financial ducks in a row. Analyze with great attention to detail your costs per unit of production over the last 3-4 years, and be ready to justify certain expenditures from the standpoint of ROI. Third, have a good handle on your risk management strategy.   Be ready to explain to the lender how you are mitigating risk, whether it be on the cost of, say, diesel fuel, or with regard to the price potential for your crops.  

  3. Tips For Farmers When Working With Lenders By Benedict T. Palen, Jr. Fourth, put yourself in the lender’s shoes. Ask yourself whether you would lend money to someone wearing the same shoes as you, and think about what you would ask the prospective borrower. Fifth, even if you have been with one lender for a long time, look around, and have a Plan B in case things do not pan out with the current lender. 

  4. Tips For Farmers When Working With Lenders By Benedict T. Palen, Jr. Finally, perceptions matter.  Do a drive through of your farm with the lender; show him a clean farmstead, well maintained machinery, and fields in good condition. 

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