When you’re considering your financing options, you need to take the time to evaluate your business decisions. When you’re just getting started, having an experienced financial partner can ease the load. At GreenStone, we specialize in working with beginning farmers. In 2020, young, beginning, and small farmers totaled more than 22,000 of our Farm Credit Services customers across the nation. We are committed to helping the next generation launch and successfully run their farms, and we can provide the financing to help make that happen.
Let’s look at the top five questions to ask before securing financing:
How much should I borrow?
This is a great discussion to have with your business partners, family, financial advisor, and lender. There are also a variety of online loan payment calculators you can use. Of course, being able to easily make the payments is the main consideration. However, even if you have the ability, you don’t want to borrow more than you need, because that makes the loan more costly over the life of the loan. Take the time to go over all your financial records, income statements, add up your debts and anticipated expenses, and figure an ideal loan amount that works best for you and your business. Our loan officers will go through the figures with you to come up with the perfect number – one that allows you to do what you want, without causing too much financial stress.
“It’s essential to start a lending relationship with your financial services officer,” said Ann Allen, GreenStone regional VP of sales & customer relations. “Even if you don’t have a loan request today, and maybe your financial documents are not completely organized, it is vital that you start communicating with your lender. This relationship will ensure you provide all the information needed to make the loan decision in a timely manner.”
What’s the interest rate?
Your interest rate is the cost of borrowing money, so you of course want to seek the best one you can. The lower the interest rate, the less you’ll be paying. You will want to take loan length into account as well, since the length of the loan will affect the interest rate. The rates fluctuate depending on many economic factors, so be sure to take advantage of them when they’re low. You’ll also want to know if your loan has any pre-payment penalties, so know if you can pay it off early if you get the opportunity.
What are the fees?
Fees that may be charged included appraisal, title, closing, flood, credit, report, recording, survey, and inspection. There are both fixed and variable fees associated with borrowing money. The fees will be explained and disclosed ahead of time by your financial services officer so there will be no surprises at the closing.
How long will the loan process take?
The more prepared you are, the less time it takes. Make sure you have your financial documents in order, so you can have an informed discussion with your lender. Your loan officer will ask for tax returns, pay stubs, bank statements, credit history, identification, and other documents as needed. You will work closely with your lender to make the process as smooth as possible.
How do I choose a lender?
Our customers choose to work with GreenStone for many reasons. Here are a few.
For over 100 years, GreenStone has partnered with farmers to provide the capital to help support and grow businesses. We have the expertise to help customers achieve their farming goals. We’re also a member-owned cooperative, which means that we’re able to share our profit through our patronage program; we’ve returned $605 million to our members since 2005! GreenStone provides financial services to the agricultural industry - including short, intermediate and long-term loans, equipment and building leases, life insurance, crop insurance, accounting and tax services. We have great rates available today. Want to know more? Visit greenstonefcs.com/greatrate