When you’re just getting started as a beginner farmer, it’s easy to feel overwhelmed by the amount of new information you’re learning and keeping track of everything you need to stay organized and successful. Whether you are in line to take over operations of your family’s multi-generational farm or starting your own farm from the ground up, here are some questions to consider ahead of meeting with your lender to help them provide you with the best support possible!
1. Define your business goals
The first step in any business should always be to define your goals. Not only will this help to inform the decisions you are making around your business, but it will also set you up for success when it comes to working with your lender to help them clearly see your vision and strategy for your business. A clear and defined business strategy acts as a roadmap for achieving your goals.
Start by defining your SMART goals - that means specific, measurable, achievable, relevant, and time-bound goals. This framework will help you prioritize which goals are the most important and help you dive deeper into the details of your vision for your farm. Understanding your needs ahead of time is crucial to effectively communicating with your lender and developing a plan that fits your needs the best.
Before engaging with your lender, take the time to thoroughly assess your business strategy and financial goals. Having a clear vision of your lending requirements, including specific purposes and estimated costs, is essential. This preparation will not only streamline your conversation but also position you as a well-informed borrower.
2. Provide as much information up front to your lender as possible
Even if you don’t have every detail of your business plan worked out or your balance sheet filled in, providing as much information as you possibly can will go a long way in helping your lender determine what your needs are. Your local GreenStone team has been helping farmers like you for over a century and would be happy to sit down with you to review how to complete these important financial documents.
Another reason it is important to provide as much information as possible to your lender is to help them match your loan terms to your specific needs. Let’s say you are looking to finance a piece of farm equipment such as a tractor. You will want to opt for a short-term loan request versus a long-term request for something like a land purchase.
If you know you will need financing for farm equipment in addition to a construction loan for adding on to your facilities, it is important to communicate this to your lender as soon as possible. They may be able to package your lending needs together into one loan request. This is yet another reason why it is important to provide as much information to your lender up front as you can!
3. There are resources available to help you!
While it may feel daunting when you are first starting out, there are a multitude of resources available to you as a young, beginning, or small farmer. Many organizations like Farm Bureau and other members of the agricultural industry offer educational and networking opportunities or resources valuable to you. GreenStone’s own CultivateGrowth program offers a mentorship, educational resources, grants, and more to support up and coming farmers whether you are starting your own farm or taking the reins of a multi-generational farm.
Many agricultural lenders also offer more relaxed underwriting standards to help beginning farmers overcome the financial challenges they might face being a new farmer to help them get started.
When you work with an agricultural-based lender, not only are you able to receive financing and support specific to your growing farm, but chances are you’re also getting the expertise of fellow farmers. Many members of our team at GreenStone are involved in running a family farm, have a hobby farm or farm animals, or are involved in supporting a number of agricultural organizations outside of work. At GreenStone, we live the country lifestyle too! Having a lender that knows what you’re experiencing - because we’ve been there too - is paramount to the kind of support you will receive when you are first starting out as a beginning farmer.
If you have any questions on resources for beginning farmers or are ready to take the next step and apply for financing for your farm, reach out to your local GreenStone expert. We are eager to support the next generation of young, beginning, and small farmers.
This article was originally published in Michigan Farm News.
