It’s “almost” spring as I type. Less than a week ago it was sunny, 70 degrees and a bit windy. Our fields were finally getting a chance to dry out. Now, I’m looking out of my window at 3-plus inches of snow, below-freezing temps and cloudy skies. It seems like Mother Nature cannot make up her mind and Punxsutawney Phil is just as unreliable. But the one thing you can rely on this time of year is a call from your lending partner about updated financial statements and your annual farm visit.
Most people get why your lender asks for financial information. After all, they have a job, same as you, to prove that your operation is cash flowing and building equity. These statements just show it in writing, as well as making it easier for your lender to make a quick decision when any new needs arise. But why a farm inspection? Doesn’t your lender trust you? Doesn’t he or she know how busy you are between planting and calving, harvesting and weaning? Can’t they just look at your financial information to see how well you’re doing?
The short answer is yes, but there is another element at play here: Relationship.
The key to any good relationship is communication, whether it’s with a spouse, neighbor, farm store manager or your lender. An annual farm inspection is just another communication tool lenders use in their relationships with you, the farmers and ranchers.
Sure, it’s easy for a lender to wait for you to come into their office and let them know what is going on with your operation, but that also means the conversation is being held on their turf. A lender sitting behind a desk and you in front can seem like going to the principal’s office. Together you can go over tax returns, profit and loss statements and balance sheets until the sun goes down, but in the end they’re just numbers on a sheet of paper.
A farm inspection turns those tables. The conversation is being held on your farm, about your goals. The lender can see your farm in operation and observe your dedication to your chosen line of work – that makes a difference.
Many farmers and ranchers end up enjoying the inspection. They can show off the fruits of their labor: New fencing, heavy weaned calves and fat mommas, new planting techniques and grain in the bin. Those visuals can go a long way in making a point – seeing the abundant pasture in person proves the need for more cattle to harvest it or observing the efficiencies of the no-till drill borrowed from the Extension office can spark a discussion about purchasing one for the farm. Lenders can see the day-to-day impact of those financial statements – inputs and outputs, assets and liabilities.
The farm inspection is not just to ensure the bank’s collateral position is secure. It’s about engaging in conversation, proving an interest in your operation’s well-being, cementing that farmer-lender relationship. While touring the farm, topics will come up that normally wouldn’t in an office setting, giving lenders much more insight into how to help you reach your goals. The farm visit is not about trust but about engaging in one-on-one conversation and intentional listening with you, the customer.
Jessica Allan is an agricultural lender and commercial relationship manager at Guaranty Bank in Neosho, Mo. A resident of Jasper County, she is also involved in raising cattle on her family’s farm in Newton County and is an active alum of the Crowder College Aggie Club. She may be reached at
[email protected].
