The Value of a Good Ag Lender

By Craig Gocken, Vice President Onarga Facility

Making sure that the relationship between you and your lender is a good fit can be crucial to the success of your farming operation. It is key is to find a lender who understands agriculture and is comfortable working within the industry. Here are some key points to consider when working with an ag lender.

Experience

Experience is very beneficial in the borrower/lender relationship. One recommendation would be to work with a lender who understands commodities, markets and production, as well as the risks associated with those commodities. A lender with experience and understanding about your business is more capable to making sure that your risk is managed appropriately.

Commitment to Agriculture

Experts will tell you that you need to know a lender’s commitment to agriculture in its total loan portfolio. In addition to experience and understanding, commitment to agriculture is essential in a lender. Federated bank is committed to agriculture and its foundational role within our community. We want all businesses, including agribusinesses, to be strong and thriving as it benefits all of us.

Capacity

It’s important to make sure an ag lender has the capacity to meet your needs with its products and pricing. Lenders who dabble in ag lending probably don’t have the experience or commitment to ag lending. They probably also may be limited on the amount of funds they can commit to you and your operation.

Final Thoughts

Finding a good ag lender is a little like finding a good doctor or mechanic. You want someone whom you can relate to and rely on to help keep you straight. With that in mind, remember these steps when considering a new ag lender:

• Seek personal referrals from other farming friends whom you know and respect. Asking who they bank with is a good start.
• When visiting with an ag lender, go in prepared with a list of questions that pertain specifically to your business.
• Who you work with can be as important as the terms of your loan. Having preferred interest rates, term limits, or other loan benefits are key but so is the individual you are working with.

At Federated Bank, we have the experience, commitment, and capacity to help you manage the financial risks of your farming operation. If you’d like to discuss this information or how we can assist you and your farm, call us or stop by.