What to Expect

Each long-term agricultural real estate loan is unique and our borrowers have financial situations and needs that are profoundly different as well. For many, the information requirements involved in the long-term mortgage loan process seems overwhelming. We get that. Our desire is to guide you effectively through the process. From initial contact through the actual loan closing (often occurring at your farm or a title company’s office) you will work almost exclusively with one or two loan officers. Our inquiries into your balance sheet and historical income data will be thorough but organized and centered on creating a smooth and trouble-free borrowing experience for you. In order for us to start the analysis process for your transaction, we will need you to provide us with specific financial information for each individual and financial entity involved in the proposed transaction along with information on the proposed security (see our application checklist for more details):

Once we have this information, we can begin our analysis and will be in regular contact to discuss budgets, operational needs, and uses of funds during this process. The analysis of your agricultural real estate loan is very dependent upon the level of information we receive and our analysis work can be completed as quickly as two to three weeks. Committing and closing the real estate loan will add substantial time to this process depending upon the availability of an appraisal on the real estate utilized for security. A normal estimation for a closing on a commercial agricultural real estate loan would be 60 to 120 days from start to finish.

As a balance sheet is developed or restructured, we encourage building a common sense structure within the liability side of your balance sheet. We don’t fixate on what is the easiest loan to get the job done but, rather, what type of structure fits your operation. Each of our transactions is focused on the needs of the family or operation after this land acquisition, refinance or restructure is in place. After all, part of our job is to use our experience to stretch your closing dollars as far as any of us can see into the future – allowing us not only to complete the real estate financing challenge at hand, but to prepare you for those opportunities yet to come. Some of our conversations will involve several of the following questions:

  • Does your balance sheet allow you the liquidity of movement to adequately address movements in your marketplace without taking unnecessary risks?
  • Does your current financial position give you more than adequate liquidity to create comfort for your operation in areas of risk, uncertainty and unforeseen losses?
  • Does your long-term borrowing structure operate independently of the position of your short-term borrowing needs?
    Is the collateral base used for operational financing and long-term real estate borrowing structured independently of each other – giving you the room to buy, sell and maneuver in case of some unforeseen and unique opportunity or perhaps a financial set back? Or are you subject to the control of lenders in almost every situation you encounter to grow, sell, borrow, pay down, acquire and deal with uncertainty?
  • Does your real estate exhibit several distinct and separate land tracts? If so, have you considered making sure that you can buy, sell, trade, encumber, payoff or pay down an individual tract of real estate without being forced to come to the table of your lender and complete your idea or transaction within their parameters or their terms which could include unnecessary loan restructuring and costs?
  • Or perhaps do you find yourself structuring the finances of your operation for the benefit of your lender rather than for your future?

For most folks, when times are good and it seems that any type of agricultural financing is easy and plentiful to acquire, these questions are very far back on the back burner. But this is agriculture – an industry that is incredibly complex in its production cycles, market availabilities, competition with other producers from different regions who have a different cost structure, and deals with one of the most formidable opponents of profitable agricultural production: Mother Nature.

For over twenty years we have been independently investing money in northwest agricultural real estate mortgages through both good times and bad. Our experience tells us that the structure of your debt is as important as the interest rates you pay and the structure of your debt is what will allow you to survive when times are not so good and commercial agricultural real estate loans are extremely hard to acquire. The transactions we close with your real estate needs in mind today absolutely have to be structured for your benefit in the future when, perhaps, situations you never imagined will become a paramount obstacle or opportunity. Without the correct structure to build upon for this uncertain future, the transactions closed today become just that…transactions – and some of them could be regrettable without this type of planning and experience involved. We continually focus on your ability to grow, adapt, recover and survive through not only your real estate financing needs for your balance sheet today, but for your success and survival tomorrow in this vibrant but changing economic world. Envisioning your financial future is always difficult. We have the proven, real world experience that you can work with in developing tomorrow’s agriculture…today.

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q box2 Do you write second mortgages?

a box2 All of our loans are secured by a first mortgage position on real estate.

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