What to Expect
Each long-term agricultural real estate loan is unique and our borrowers have financial situations and needs profoundly different from each other. 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 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 centered on creating a smooth 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 entity involved in your operation, along with information on the proposed security (see our application checklist for more details).
Once we have the financial 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 evaluation of your agricultural real estate loan is very much dependent upon the level of information you provide, and our analysis work can be completed as quickly as two to three days, once we receive all the information necessary. It’s important to note that there is usually no cost for Harvest Capital to analyze your information.
When the information has been analyzed and everyone has agreed to the proposed loan terms, uses of funds, and structure, an application will be completed and an appraisal will be engaged. Harvest Capital uses third party appraisers who are specialized in agricultural properties. Waiting for the appraisal is typically the most time-consuming portion of the loan process.
Once the appraisal is received, Harvest Capital will be able to formally consider the loan request, develop a commitment to lend and close the loan. A reasonable estimate for the amount of time it takes an agricultural real estate loan to close would be 60 to 120 days from start to finish.
During the loan process we will evaluate and encourage building a common sense structure within the liability side of your balance sheet. We are focused on what type of structure fits your operation, what the future needs of the family or operation could be and how we can stretch your closing dollars as far as possible by anticipating future needs and opportunities.
Some of our conversations will involve several of the following questions:
- Does your balance sheet allow you the liquidity 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 setback?
- Does your real estate exhibit several distinct and separate land tracts? Does it make sense to put separate loans on each tract so that you can buy, sell, trade, encumber, payoff or pay down each loan independently of each other?
- Do you find yourself structuring the finances of your operation for the benefit or mandates of your lender rather than for your own future?
Our experience tells us that the structure of your debt is as important as the interest rates you payand the structure of your debt is what will allow you to survive when times are tough. 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.