On the farm in the wintertime, there might be fewer items on the “to-do” list. But one important task that usually happens in the winter off-season is to meet with your lender about the upcoming year and to renew your operating note.
Farmers have different thoughts and feelings about these lender meetings. If you have a great ongoing relationship with your banker and are in a fantastic financial position in your operation, you might even be looking forward to that meeting with them.
But sometimes, farmers can approach the meeting with less enthusiastic feelings – or even to the point of downright dreading it. Most probably fall somewhere in between.
The relationship you have with your lender and the preparation you put into getting ready to meet with them can make a huge difference to how these meetings ultimately go. It’s worth it to take some time leading up to the meeting to get a few different things in place.
Things to do
Here are a couple steps to take in the weeks or days leading up to your meeting with your lender.
- Plan, plan, plan. Your lender wants you to show them proactive plans for the upcoming crop year. They want to know that you’re on top of things like grain sales and plans to shore up any financial metrics that aren’t where your banker wants them to be. Work on getting a series of plans and projections in place – including, but not limited to, projections for the upcoming year, marketing and merchandising plans, as well as a plan for the banker meeting itself. If you work with a market advisor, you can practice and prepare for the meeting with them. They can ask you the types of questions that your banker may have about your plans and projections.
- Speak their language. Make sure you’re ready to use the financial terminology that your banker uses. It shows and tells them a lot about you as a business owner when you can converse using the terms that they do. They want to see your level of savvy when it comes to the metrics and numbers you use to guide your business plans. Use their terms as you explain how you put together your plans and they’ll likely be impressed and thankful to work with you as a client.
- Work with them as an advisor. Many lenders want you to have the best possible results in your business – their ultimate goal is to get paid back, after all! This relationship is optimized when you view your banker as an advisor and a resource for your farm business. Ideally, you want to work with a banker who is willing and able to act as an advisor and teacher for you. Then you’ll be able to ask them questions about the types of metrics they think would be most helpful for you to be tracking and working to improve. Lenders who truly want to be a partner and help your farm succeed will share specific ideas for improvement.
Make sure you have the right information and partners to help as you get marketing plans in place ahead of lender meetings. You can get in touch with our market advisors or get a free trial of our solutions.