In our last blog, we talked about how to anticipate and address any and all concerns your lender may have and how you can look favorable to your lender. In this week’s installment, we’ll address how to wow your lender and push them to want to lend you funding for your dream farm.
First off, you need to have some persuasive information in your arsenal. You should write up an executive summary (also known as a management summary). This is simply a short document that summarizes your story. It should be two to three pages in length, and it should summarize who you are, what you want, what your current state is and what your future state will be. The executive summary should also make reference to the detailed information that’s included in the package without getting TOO into detail.
To write a knock-your-socks-off executive summary, make sure that it’s a forward-looking piece and that it frames the detail in the context of your story. Also, like a good piece of literature, it should definitely keep the interest of the reader, which is your lender in this case.
Along with your executive summary, you should include compliance information. This information should include relevant data, such as past financial statements, income tax returns, detailed production information, and detailed budgets. By looking at these facts and figures, your lender will see if you would be trustworthy with borrowed money. Consider separating all of this information in a separate binder so that the information can be found more easily. And of course, provide the compliance information if the initial response from the lender is a positive one. This will send your lender over the moon!
Finally, be sure to answer any and all of your lender’s concerns. You’ll need to answer the five financial criteria questions, which should include discussions about liquidity, solvency, profitability, repayment capacity, and financial efficiency. Here’s a hint: by using the business practices used by FamilyFarms’ teams, you’ll show good, solid character. Additionally, be sure to ask the bank credit personnel to tour the farm. This will help you on your way to financing your dream farm!
Have questions about the lending process? Then pick up the phone and give us a call here at FamilyFarms at 1-877-221-FARM, and we can help you straight away! And be sure to stay tuned for next week’s blog – the finale of the lending blogs!