Wire fraud is costing people and organizations billions annually. CertifID identified $1.4 billion (about $4 per person in the US) in suspected wire fraud attempts during 2022. That is an increase of 181% from 2017 to 2021 (CertifID, 2022).

This is an urgent issue affecting both businesses and our customers alike. The allure of quick and convenient money transfers is undeniable, but it comes with its own set of risks. The ease and speed that make wire transfers attractive are the same factors that make them a prime target for fraudsters. Fraud like fake invoices, and real estate fraud often exploit the urgency and lack of scrutiny in wire transfer processes. Here are some tips to help keep you safe! 

Common Scams: Wire fraud is a serious crime that can have a devastating impact on victims. Here are just a few of the most common wire fraud tactics and what to look for:

• Fake Invoices: Scammers send counterfeit invoices that look like they are from legitimate vendors. They may ask you to wire money to a fraudulent account.
• Real Estate Fraud: Scammers trick you into sending money to a fake account during a property transaction, often by hacking into an individual or business email account. They may pose as a real estate agent or lawyer.
• Personal Impersonation: Scammers pose as a distressed family member or friend in need of emergency funds. They may ask you to wire money to a fraudulent account.
• Overpayment Scams: Scammers send you a check for more than the amount owed and ask you to wire back the difference. The initial check will eventually bounce, leaving you out of pocket.
• Business email compromise (BEC): Scammers hack into a business’s email account and send fraudulent emails to employees, requesting wire transfers. The emails may appear to be from a legitimate sender, such as a CEO or CFO.

Spotting Red Flags: Awareness is your first line of defense against wire fraud. Scammers are constantly evolving their tactics, so it is important to be aware of the latest red flags. Here are a few things to look for:

• Last-Minute Changes: Sudden changes in account details are a glaring red flag. Always verify added details through a trusted channel.
• Compromised Emails: A compromised email account can leak deal-specific information. Always double-check any unusual email activity.
• Unusual Urgency: Scammers use urgency to cloud your judgment. Always question why a transaction needs to be rushed.

Proactive Steps: Wire fraud is a serious crime, but there are steps you can take to protect yourself. Here are a few proactive steps you can take:

• Voice Verification: Always verbally confirm transaction details using a verified and trusted number. Never call the number provided in an email message, and always ask questions to confirm the identity of the individual on the other end of the conversation to avoid voice modification scammers.
• Secure Your Email: Strengthen email security by using robust passwords and two-factor authentication. If you think your email account has been compromised, you should review inbox rules that might have been created by the attacker to obfuscate their malicious actions – such as auto forwarding actions.
• Regular Monitoring: Keep an eye on your bank statements and flag any unauthorized transactions immediately.

What to Do If You are a Victim: Wire transfers are immediate, and this makes it difficult to recover funds. However, there are still steps you can take if you are a victim of wire fraud. Here is what you should do:

1. Contact your bank immediately: Tell them that you have been the victim of wire fraud and ask them to stop the wire transfer if possible. They may also be able to assist the authorities in tracing the money.
2. Report the fraud to the authorities: You can file a complaint with the FBI’s Internet Crime Complaint Center (IC3) at https://www.ic3.gov/. You can also contact your local law enforcement to report a crime.
3. Keep records of all communication with the scammers: This includes emails, text messages, and phone calls. These records could be helpful to the authorities in their investigation.

Your Role: The Final Safeguard

While GreenStone and other financial institutions take measures to help secure wire transactions, the ultimate responsibility lies with you. You are the final safeguard against wire fraud. By being aware of the risks, being vigilant, and taking proactive steps, you can significantly reduce your risk of falling prey to wire fraud.

• Be aware of the latest wire fraud: Scammers are constantly evolving their tactics, so it is important to stay up to date on the latest frauds.
• Be vigilant: Do not rush into sending money. If something does not seem right, it is not.
• Take proactive steps: Do not wait for something to happen. Take steps to protect yourself, such as verifying the recipient’s information carefully and using a secure payment method.

By following these tips, you can help to protect yourself from wire fraud. Remember, you are the final safeguard.

References

• CertifID. (2022). State of Wire Fraud: 2022 Trends and Industry Forecasts. Retrieved from https://www.certifid.com/state-of-wire-fraud-2022

 

To view the article in the online 2023 Fall Partners Magazine, click here.

Whether your roots run deep in the field, or you’re establishing roots in a new home, we’re here to help make your dreams a reality.

Maybe you’re looking to build a home for your family to settle in the country, a hardworking farmer getting ready for harvest, or on the hunt for recreational land ahead of deer season. There’s one thing you should know: GreenStone has you covered.

It’s our vision to be rural America’s first choice for financial services, and we live that vision each and every day by offering a wide range of financing options for farmers and rural residents in Michigan and northeast Wisconsin.

Helping You Establish Roots: Loan Options for a Country Home

• Home loans: You can count on our expertise in rural homes to provide you the best financing possible for your dream home in the country.
• Home construction: Whether you’re doing it yourself or hiring a team of builders, we can help you finance your dream home build in the country.
• Home site vacant land: When you find the perfect location for your new home, we can structure the financing to align with your building plans.
• Recreational vacant land loans: Owning your own special place to hunt, fish, hike or simply enjoy time outdoors with family and friend is possible with a recreational land loan.

Your Roots Run Deep: Loan Options for Farmers

• Farm operating loans: A readily-accessible line of credit to give you the flexibility and stability to manage your business – from planting season, to harvest, and everything in between.
• Farm real estate loans: We have the expertise to provide farmers of all sizes the right land loan package to fit your needs.
• Farm construction: With the option to fully-contract construction work or do-it-yourself, we have loan programs to fit your unique situation.
• Farm equipment: We provide loans for equipment, livestock and facilities with terms up to seven years with customizable repayment options and interest rates.
• Farm leasing: The option to lease provides significant advantages over owning as it can be an excellent way to reduce costs, improve cash flow, avoid equipment obsolescence, free up capital and maximize tax advantages.
• Agribusiness: Our team of experts will work with you to design a financing program or provide services to meet your business needs.
• CultivateGrowth: We provide flexible loan terms for young, beginning and small farmers to build a foundation to flourish in their agricultural aspirations.Part-time farm: We understand the specialized nature of part-time farming and will work with you to meet your unique financial needs.

Get Started!

Our team of experts in agriculture and rural home and land financing are ready to make your dream a reality.

Get started, apply now or reach out to your local branch to connect with a financial services officer, today!

Taking the leap into home ownership is a big decision, and there are many factors to consider before going on the hunt for the perfect homestead. When you are ready to make that leap, you will quickly realize there are many benefits to owning a home. Here, we outline some reasons to consider taking that leap!

Building Equity and Credit

A home is not only an investment in your quality of life and future, but also your financial stability. Unlike renting, your monthly payment doesn’t go towards someone else’s investment, it goes toward your own. Owning a home allows you to build equity over time. Equity is the difference between your home’s value and the remaining loan balance. As you pay down your loan, your equity will typically go up over time.

Making full, on-time payments towards your home loan can also help boost your credit score. A high credit score can help with future finance opportunities. Oftentimes, rent payments are not reported to credit bureaus and therefore, do not count towards a credit score.

Stability and Security

Home ownership provides a space of stability.  You as the owner have full control over the living space. You can make any modifications or renovate it to your liking, without the limitations that typically come with a rental space.

This ownership also brings a sense of security. If you have a fixed-rate mortgage, you can count on a consistent monthly payment for the life of the loan. When you rent, your rent rate will be evaluated at the end of each lease agreement and could potentially go up.

Tax Advantages

• Home mortgage interest is tax deductible, which could mean a reduction in the amount of federal taxes you owe.
• Mortgage insurance premiums may also be tax deductible, depending on your income.
• Property taxes can also be deducted up to $10,000 if you’re single or married filing taxes together. The deduction limit goes down to 5,000 if you’re married but filing separately.

Building Pride and Roots

Owning a home and being part of a community brings a sense of pride. Not only do you have the freedom to personalize your space that reflects your style, more importantly, you are building roots and a foundation to build on. When you buy a home and settle down in a community, you can engage with neighbors, make friends, and host the next family gathering.

Get Started

Whether you plan to purchase a home or put on the hard hat to build your dream house, GreenStone is here with flexible financing options to fit your needs.

To get started on a loan application, click here, or have a conversation about your next steps by reaching out to your local branch today!

From keeping track of your financials, to writing up purchase agreements and making decisions about the future of your operation, there are many responsibilities outside of managing crops and livestock on a farm. Having a team of trusted experts on your side will help alleviate some of the stress and contribute to the success of a farm operation.

Loan Officer

Meeting your capital needs of the day-to-day operations, equipment, structures and real estate purchases, you may need to explore financing options. Having a loan officer who specializes in agriculture and can understand your operation is a contact you need in your phone.

A loan officer can help with structuring any loans you may need that best fit your operation.

How often should I speak to them? You should have regular contact with your loan officer, even in times you don’t need financing, to keep them involved in the direction your operation is growing. This will keep them in the loop on future financing opportunities and equip them with the information and knowledge to be able to assist when the need arises.

GreenStone’s team of financial services officers understand the unique needs of agriculture and are experienced in helping to find options to fulfill the financial needs of farming operations and rural communities.

Accountant

It’s important to have an accountant to help keep accurate business records that other members of your farm team will need, such as your loan officer. Having an accountant helps you focus on your day-to-day operations and lessens some of the stress record keeping can carry.

Your accountant can help keep your books up to date with all the expenses and incoming capital, along with end-of-year financial reports and tax planning.

How often should I speak to them? It varies! The more you keep up on your books, the easier it’ll be to provide your year-end financials to your lender and be aware of your financial situation throughout the year. Even having someone keep up with your operation’s financials once a month makes it easier at year-end, so you’re not stuck with a shoe box full of receipts.

Attorney

Another person you will want to be a part of your farm team is an attorney. A lawyer is there to assist you in writing purchase or rental agreements for your operation. Their expertise also extends into helping you work through a succession plan and can provide legal guidance and assistance for that transition and other business decisions.

How often should I speak to them? You should reach out to your attorney any time a legal binding document or agreement needs to be made, and when you’re evaluating operational decisions and farm transition plans.

Agronomist

Preparation for the growing season can be a long process. An agronomist specializes in crop production, soil control and management. Having regular soil testing done to help determine fertilizer needs will improve and maximize crop production. Having someone on your team with expertise to assist with crop scouting and consult on chemical and fertilizer application options can also help improve yields.

How often should I speak to them? You should check in with your agronomist before, during and after your growing season so they can test your soil, discuss the growing season, and provide recommendations for any applications or adjustments that need to be done.

Nutritionist and veterinarian

If you are a dairy or livestock farmer, you know the importance of having a nutritionist and veterinarian on your team.

A nutritionist can assist in monitoring your animals and how they’re reacting to certain feed types and make necessary adjustments if needed. Being present when your nutritionist is on farm can help grow the relationship with them so that they are a trusted advisor you can call on to keep you abreast of new ideas and products.

Veterinarians not only help with herd health and reproduction decisions but can also be an asset to have on the farm regularly to provide additional industry information.

How often should I speak to them? You will typically meet or speak with a nutritionist and veterinarian weekly to monthly depending on your operation.

Business consultant

When you decide it’s time to expand or change something about your operation, you want a business consultant in your corner to help you make those decisions. Business consultants can run through scenarios for your farm that other people on your team may not be able to.

Additionally, if you’re selling your crops, meat or value-added products directly to customers, business consultants may be able to assist you with marketing.

How often should I speak to them? You should contact your business consultant when you see opportunities for growth on your operation or when you have a question about how to best advertise your products.

Network of mentors and peers

A member of your farm team that may be overlooked is a mentor and/or peers who have been in the business for a while. Having a network of people you can approach with questions and call on their experience to learn from or gather ideas from can be helpful.

GreenStone offers a mentorship match through our CultivateGrowth program for young, beginning and small farmers. Learn more about how to get involved in the next cohort here.

How often should I speak to them? You should speak with your mentor frequently, especially when you have questions about your operations that they may be able to help with. Connecting through visiting each other’s farms can be insightful for both parties.

Look for peers that are also at the same stage you are in your farm journey. This is an opportunity to lean on one another and share new ideas that could help take your farm to the next level.

Having regular farm meetings with all members of your team of experts can help ensure that everyone understands the position and goals of your operation.

 

This article was originally published in Michigan Farm News.

Farming is a capital-intensive business, with land, equipment and facilities that can run into millions of dollars. Beyond these capital expenses, farmers face annual input costs for seed, fuel, chemicals, etc. These inputs are often needed at the beginning of the growing season and paid for with proceeds from the sale of crops months in the future. To bridge this gap, many farmers utilize an operating loan, which is a revolving line of credit for the farm.

These loans are tied to the production or operating cycle: money loaned at the beginning of the season is expected to be used for the essential inputs needed to raise that season’s crop, and then paid back at the end of the cycle with the proceeds from the crop or product that was produced using the inputs purchased. This is different from term loans as those are tied to the productive life of the asset being financed, such as up to seven years for equipment or up to 30 years for real estate loans.

Often, using operating funds provides producers access to early-season or pre-paid discounts. For example, reduced prices on seed if purchased in December for a crop that will not be planted until April. In the current economic environment, higher input costs, along with lower crop prices, have led to lower levels of working capital. As a result, operating loans have become more prevalent even among the most financially sound farmers who may have traditionally paid for inputs with available working capital.

Many farmers employ the revolving line of credit at the beginning of the production cycle, then pay it off at the end of the productive season using the profits from the sale of their crops or products, and then start the process again for the following season. Using an operating loan, money is drawn as needed and interest begins accruing only as funds are pulled from the credit line. 

Operating loans are not commonly used to finance capital investments, because of the short-term nature of the loan. Short-term financing for a long-term asset can cause repayment challenges, which is why farmers more commonly match their financing to the useful life of the asset. 

Typically, the security for operating loans is the chattel, a word used for shorter term farm collateral, which can include the crop, both growing and stored, as well as machinery and equipment. Occasionally, a farmer will prefer to use real estate as collateral for an operating loan, such as in scenarios when the crop itself is jointly owned, or there is a prior lien holder on the crop. Security for the operating loan is primarily the borrower’s decision based on their operation’s unique situation. However, when the crop is used as the collateral, in some cases the lender may also require crop insurance, with an assignment of indemnity on the policy. 

One of the risks of employing an operating loan is when the crop itself does not yield enough return to pay off the loan, such as when prices drop unexpectedly or poor yields. In this type of situation, the farmer may be forced to carry the operating losses into the following crop cycle if they do not have alternative capital available to cover the balance. As farmers know, the continuation of this situation impedes profitability and the accumulation of working capital, and increases financial risk.

Operating loans are common across industries, from dairies to cash crops, fruit orchards to vegetables, nurseries to greenhouses. When used properly, they provide financial liquidity when it is needed most, with a short-term repayment to be able to efficiently remove this debt from the balance sheet.

Martin Kasperski is a vice president of lending with GreenStone. To learn more about GreenStone’s loans or speak directly with a financial services officer near you, stop by a local branch.

Both experienced and beginning farmers alike need new machinery and equipment to maximize the farm’s potential, and they don’t always have the cash flow necessary to purchase these crucial updates.

In many cases, leasing can often provide a solution. Among the many benefits of leasing, some of the key factors for you might be:

• Zero down payment
• Quicker depreciation than with a typical loan payment (See your accountant for your specific information)
• Flexible payment schedules
• Simple application and easy approval process (Farm Credit can offer lease options under $250,000 with only a 2-page application and current balance sheet required)
• Lease-to-Own options

What Can Be Leased?

Every leasing company may be different. Through Farm Credit Leasing, farmers can use a lease for most equipment and vehicle needs for your farm or agribusiness, new or used, like:

• Machine sheds and storage buildings
• Grain bins and handling facilities
• Livestock and dairy facilities
• Pole barns and farm shops
• Climate controlled buildings
• Greenhouses
• Tractors
• Irrigation systems
• Processing and packing equipment
• Fertilizer spreaders
• Fleet vehicles
• Solar Projects

That’s right, barns and buildings are included. You can even lease buildings like packing sheds and even production facilities. Of special note is that with a building of less than $500,000, the building itself is all the collateral needed with a Farm Credit lease, which means you can have the building you need without leveraging your other assets like the land it sits on. You can even lease a building on land you rent from someone else.

When it comes to vehicles, because Farm Credit leasing buys direct from auto manufacturers like Ford, GM and Dodge, you can lease fleet basic or customer vehicles like trucks, cars, over-the-road haulers and even ATVs at major savings – perfect for farmers who need to manage their farm to get their produce to wholesalers quickly.

Saving Money, Leveraging Risk

Farming has its unique challenges and risks. Farmers deal with threats like Mother Nature, crop disease and pests. Leasing can help mitigate some of these risks by helping you with your cash flow. 

With a lease, customers can preserve working capital. Leasing can provide 100% financing with no down payment required. Along with this helping people save money for other expenses, it still allows you to get the equipment and facilities you need to grow the business.

Lease payments can be tailored to fit the customer, including monthly, quarterly, semi-annually, and even seasonally.

Tax advantages

When it comes to paying taxes, business owners are always looking for ways to put themselves in a better financial position, and leases are another tool that can help. Leasing can offer a variety of tax advantages. Not only may lease payments be fully deductible, but expensing lease payments over the term may reduce taxable income.

Tax rules can change every year. By utilizing a lease, a borrower can know exactly what expenses to plan for over a longer period. My advice is it’s best to take the tax advantage when you have the opportunity.

It is also important to note leasing also allows owners to seamlessly transfer leased assets to the next generation. This keeps the asset out of the estate, which offers tax benefits. At the time the residual on a lease comes due, the next generation can purchase the assets for the residual amount.

Expert support

When looking at options, it is beneficial for your financial partner to understand the different types of farm businesses, as many can benefit from an accelerated write-off.

When you’re looking at options, it’s important you work with an expert who understands how a lease agreement might benefit the business.

Through GreenStone’s partnership with Farm Credit Leasing, we’re able to offer you this expertise.

 

This article was originally published in Michigan Farm News.

Deciding to settle down in the country and buy a rural home is exciting! You will be able to enjoy the benefits of rural America in your own backyard – like the ability to have a campfire with your children, enjoy a summer evening on the patio, or snuggling up by the fireplace on a wintery morning. 

If this is your first time purchasing a home, there are a few things you need to know to get started with the process before calling a realtor. 

The Documents you Need

Before getting in contact with your realtor, it’s best practice to find a lender so you know how much money you qualify for to attain a home loan.

Once you have worked with a lender, like GreenStone, to review your finances and have determined how much you can afford, you will take that pre-qualification letter to a realtor for them to help you search for a home in that price range. 

Other physical documents you should have handy for your realtor include your contact information and how you want to be reached by them. You should also provide the contact information for your lender so your realtor and lender can communicate. 

The Information you Need to Bring to the Table

The biggest thing you need to think about once you have established your pre-qualification price range is your wish list. 

Ask Yourself:

• What type of house are you looking for?
• How much property do you want?
• Is there a specific area or school district you want to live in?
• How many bedrooms and bathrooms do you want/need?
• Do you need certain appliances to come with the home?
• Are there deal breakers?

Having your clear list of reasonable “wants” will help your realtor narrow down options for you. 

Another thing your realtor needs to know: Will your purchase be contingent on selling your current home or property, if you have one? This could impact the timeline or likelihood of certain home purchases.

The final thing you need to consider before meeting with your realtor is concessions. These can be things like only putting 5% down and asking the seller to cover your closing costs. These are things your realtor needs to know to assist you in making an offer on a home.

You Have a Team

Buying your dream country home can be challenging, but in the end, extremely rewarding for you and your family. It’s important to remember that you’re not alone; you have a team of experts helping you every step of the way.

Choosing the right lender and realtor that shares your vision can help make this a seamless process.

GreenStone has an experienced team of experts helping you finance your dream country home. Learn more about our home financing options here. 

Coming from two different backgrounds, Cassie Eadie and her husband Andrew’s ag expertise varied drastically. Andrew grew up on the family dairy farm in Ottawa county and running an operation was second nature. However for Cassie, this was a whole new world. After beginning the transition and purchase of E-D Farms from Andrew’s parents, she knew she needed to get up to speed quickly. 

For new farmers like Cassie, GreenStone’s CultivateGrowth Mentorship provides a way for industry leaders to share their lifetime of these lessons and expertise with young, beginning, and small farmers. The current 2022-2024 mentorship class which Cassie is a part of, is underway and both mentors and mentees have already benefited from the friendships formed.

Cassie joined the mentorship program to connect specifically with a female farmer who has a similar human resources role in managing employees of varying demographics and cultural differences. Cassie knew having a mentor in a similar position would help advanced her operation by getting guidance on the current operational challenges she’s facing. With her specific goals in mind, GreenStone paired Cassie with mentor Anna Link, a part-owner of Swiss Dairy Farms in Kent County that currently milks over 5,000 cows. 

GreenStone’s program began with an in-person kick-off event and throughout the 18-month program, participants are expected to connect often and meet in-person at least quarterly. Pairs are encouraged to meet more often to maximize both the mentor and mentee’s program experience – something Anna and Cassie have certainly taken advantage of. The two have stayed on track by meeting right away to review Cassie’s goals and tour each other’s operation. They now meet in-person monthly and have weekly calls to connect and ensure those goals are on track. 

“Anna’s been helping me with my five-year business plan, implementing HR management plans that our farm has been in need of and helping me to do ‘coaching vs. warning’ with employees,” Cassie says. “She gives me book recommendations on enterprises or how to run a profitable business and shares updates from her operation for ideas on what we could be doing.” 

Since the mentorship program, Cassie has implemented a multitude of enhancements on her operation to improve efficiency and better her own leadership skills. One change Cassie focuses on is adding more coaching into her operation with her employees. If an employee has attendance issues, rather than giving them warnings prior to termination, Cassie has redirected her approach to focus on how she can better understand her customers and what might be the real problem.

“If an employee shows up late three days, why give them a written warning when instead we can work together to figure out what’s going on? There might be something personal going on and we can help coach them through that,” Cassie explains. “My goal is to help my employees be better people, along with myself through this program.”

Cassie isn’t the only one benefiting from her mentorship with Anna. As her father-in-law, Arden, continues the transition process, Anna has shared her experience in the transition their own operation previously underwent. This has helped Arden, Cassie and Andrew get on a similar page with the succession plan. 

“This is really beneficial for young farmers who are going into farming, especially people like me, who married into it,” Cassie says. “It’s very different for me, I didn’t grow up in this like Anna did and just having a mentor be there to guide and listen is a huge thing!”

The next class of mentees and mentors will kick off fall 2024 but interested farmers can apply online now.

To determine eligibility for a loan, GreenStone and many financial institutions use the five C’s of credit to make a determination – character, capacity, capital, conditions, and collateral. Rightfully, the word “collateral” can leave you with an anxious feeling about putting things like your land, home or even commodities up to secure a loan.

The good news: With a lender who works with you, focused on ensuring your capacity to repay is sufficient to be able to make the payments on your loan, you should be comfortable securing your promise to repay the loan.

Why does my lender need collateral from me?

Before a lender issues you a loan, they want to know you have the means to repay it. Collateral is an extra layer of security for the lender to ensure there is less risk by having the collateral to cover the loan if the financial need arises.

When a lender has a claim on one or more of your assets for collateral, it’s called a lien. For example, if you put your home up as collateral to secure a loan to build a barn, your lender has a lien on your home.

We view a lending relationship as a partnership, where GreenStone is the “silent partner” of the business we invest in. Your willingness to pledge collateral is part of our evaluation of your confidence in your ability to financially perform as you have projected. GreenStone is a cashflow and earnings lender, with collateral serving as a secondary source of repayment in the unlikely event you are unable to make scheduled payments from the ongoing farm business’s day to day operation. The amount of collateral you are willing to pledge is factored into the final pricing of your loan, in general terms the more you pledge, the better your loan pricing.

Proactive, respectful communication is the key to any healthy relationship. GreenStone’s philosophy is to develop a strong relationship with each customer, practicing and encouraging proactive, two-way communication.  This sets the foundation for working through financial challenges when they arise.  Our goal is to arrive at a “win – win” solution when the need to modify existing loan terms is needed.  We refer to this as “rebalancing or restructuring” your balance sheet debt that matches your available cash flow to service your debt which we do for our customers when it is needed.

Unfortunately, relationships sometimes break down.  Thankfully, this is a very rare occurrence with our customers as evidenced by our customer satisfaction which has consistently scored in the mid-90s out of 100 points for many years now.  It is only when there has been a serious default of the terms of a loan agreement that communications have broken down and we are unable to arrive at a mutually agreeable plan, directed by you, to correct your financial challenges.  We work with you to evaluate your plan to adjust your business that will result in improved net income margins needed to service your debt in a timely manner.  When operational improvements are not adequate, we evaluate your plan to sell non-productive assets.  If we cannot agree on the first two steps, we will work with you on a timeline to refinance your GreenStone loans with another lender.  When it becomes apparent that we will not be able to arrive at an agreement to reorganize or refinance, we are left with the last option of legally enforcing the terms of the loan agreement in the event of default.  This may include foreclosing on the collateral pledged to secure the repayment of the loans.

How much collateral you should expect to pledge

In general, the higher your risk profile, the more collateral we will request to secure your loan(s).  Most financial institutions, including GreenStone, typically take collateral based on what we are being asked to finance along with additional collateral pledge requests customized to your individual financial position.  For example, if you are taking out an operating loan, at a minimum, you would pledge operating assets like crops and accounts receivable. If you’re taking out a land loan, you will use real estate you own as collateral.

For a short-term loan, which is typically under ten years, our maximum loan to appraised value of collateral is 75%.  For farm real estate, we typically underwrite a loan to an appraised value of 65% or less of your assets, and with a country living loan, the loan needs to equate to a value of 80% or less of the capital value.  Variance to this guidance is considered on a case-by-case basis.

Your lender will discuss options for your collateral to decide what is best for you to put up to secure the loan you are seeking.

Does every loan require collateral?

Unsecured lending terms are typically reserved for the lowest risk customer for short-term lending circumstances.  We will evaluate the strength of the other Four C’s of credit that would mitigate the need for collateral.  If you financially qualify, it is a request we will consider.

We’re Here to Help

At GreenStone, we want to make the loan approval process as simple and streamlined as possible. Pledging collateral should only be as concerning as the idea of not being able to repay your loan. Our team of experts is here to walk you through every step of the process.

GreenStone offers a full list of loan products and expert staff to meet your individual needs. Give our local team a call to discuss your options!

 

This article was published in Michigan Farm News here.

When it comes to financing the construction of a new home, GreenStone can provide options. Whether the construction plan includes hiring a contractor or a DIY approach, there are several advantages and challenges to each option.

Do-it-Yourself

What could be more fun and exciting than building a home? Picking and choosing everything and make changes whenever you like because you are in charge of the project. In a perfect world, it would be that easy; but the reality is not everyone is ready for all that is required in building a home themself.

Often, the decision is based on whether the homeowner is up to the task of managing the entire project to make the freedom of choices and changes worth it.

Fully-Contracted

For those that decide to hire a contractor to build the home, be sure to research when choosing the contractor. This is one time when the lowest bid may not always the best bid. Take the time to check references and view their existing work.

The major advantage of hiring a contractor is they know what is required in the home building process. This includes permits, scheduling of materials and sub-contractors, realistic cost estimates, and time frames for work to be completed. 

The disadvantage of a fully-contracted build project is homeowners will likely be giving up some flexibility with changes and materials. Change orders can raise the cost of building a home significantly. The project will also be limited to the schedules of their chosen sub-contractors as to when the work will be completed. 

However, a good contractor will give a professional building estimate package, including a detailed contract and evidence of insurance. There is a fee for hiring a general contractor, but it may worth it once factoring in their discounted material pricing and efficiency. 

A Third Option

The last option to consider is more of a hybrid scenario. An individual would act as their own contractor, but hire a project manager to oversee the construction. This project manager should be well-versed in home construction and able to assist in developing timelines for the project. The homeowner would still be the one in control, but has someone to assist in decision making.

Whichever option, GreenStone’s flexibility and lending solutions will be a benefit. We have significant experience in all three scenarios, and are known as one of few lenders who understand the do-it-yourself concept. We discuss the loan options and draw process with the homeowner and the contractor or your project manager, to help make the construction process a simple and enjoyable experience.

For more information on GreenStone’s Country Home Mortgage, Home Construction and Vacant Land loan, contact [email protected] or stop by a branch near you.