Need a different lender?
My lending officer at the financial institution where I do business recently left for another firm, and I’m not comfortable with the new loan officer. Should I move my accounts to another lender? What would be involved?
Duffy: It depends on what type of accounts you have with the financial institution. Checking and savings are fairly straightforward to change. Other accounts, mortgages, etc., may have early withdrawal penalties. If this is the case, you have to decide whether or not to wait. If you do switch, be sure to remember all the places where you may have direct deposits or withdrawals. These will all have to be changed, too.
Swanson: With the current economic environment in agriculture, it may not be the ideal time to change lenders. Check to see if there would be an option to work with another loan officer within your current bank if you are not comfortable with the new officer. If this isn’t satisfactory, you need to put together a complete set of financial statements to present to your new lender. This would include an accrual income statement, balance sheet and projected cash-flow budget. A five-year history of the Farm Financial Standards Council’s “Sweet 16” financial ratios would give a trend-line analysis of your operation. If you have a business plan, share it as well.
Gassett: An application to a new lender should include three years of tax returns, three years of financial statements, a current financial statement and a realistic cash-flow projection that demonstrates the business has ability to repay the loans. If you have enterprise records, that is very good additional information. It is beneficial if you have a long-range plan in mind for the business. It’s also good if you go with the thought in mind that you will be interviewing the lender just as the lender will interview you. This approach will give a comfort level to both parties if both feel they can work together over the long term.
Out of luck on hog manure deal?
I sold 5 acres to a hog producer. He put up a building with the understanding that he or a custom operator he hired would apply the manure to my crop ground. He lost the contract he had with a hog integrator. He sold the building. The new owner has hogs in it. But the new owner wants to take the manure to a different farm. How can I get him to apply it to my crop ground?
Duffy: If there was an easement on the building for the manure or some other type of legally binding agreement, then you would have the courts as an avenue to get the manure. If this was simply an understanding, unfortunately, I don’t think there is any legal way to get the manure. If you want it, you need to buy it. This would require a manure analysis and an agreed-upon price for nutrients.
Swanson: Unless you had a recorded written document with the previous owner, it will be difficult to get the new owner to comply with the agreement. If you want the manure applied on your field, you’ll have to consent to some financial arrangement with the new owner.
Gassett: If the understanding you had with the original hog producer was verbal, you don’t have much leverage to get the manure applied on your ground. If you had an agreement recorded at the courthouse and attached to the land, you have a much stronger position.
This article published in the April, 2010 edition of WALLACES FARMER.