Don’t shoot the messenger. It’s been ingrained in the mindsets of farmers since the beginning of time to ask four words: What’s the Interest Rate?
We know it’s an important piece of the puzzle. That’s why our interest rates are competitive. But, in reality – interest rates are only part of the bigger picture of any loan – especially an operating loan. There are many things to consider when looking at your operating loan and the costs associated with it.
Here are 5 to consider when weighing your options for operating loans:
1. Timing. What’s the cost to your operation of delayed input pricing? It’s important to consider how much money you’re leaving on the table if your financing doesn’t come through until March. At FarmOp, we believe that having a clearer picture of your financing with earlier access is an integral part of the future.
2. Negotiation Power. Cash buyers have more flexibility when it comes to negotiating. We believe providing you with the cash flow you need provides you the ability to negotiate your costs and provide efficiencies to your operation.
3. 0% Financing Isn’t Free. You’ve heard it before: there’s no such thing as a free lunch. Vendor 0% Financing is the same way. Just like buying a car, vendor financing carries hidden costs. FarmOp keeps a pulse on average costs per acre on similar products and helps farmers find efficiencies beyond the 0% rate provided through vendor financing.
4. Marketing Power. Marketing grain is one of the most important pieces of running an operation. At FarmOp, we work within a farmer’s marketing plan to allow them to sell when they need to and store when they don’t.
5. Economic Impact of Not Following Prescriptions. Operations invest time and energy into getting prescriptive agriculture recommendations from the experts. What’s the opportunity cost to not following the prescription to a t? Farmers shouldn’t have to prioritize which practices to apply and which to postpone due to financing. FarmOp works to get farmers the working capital they need to fulfill their greatest return on investment.
Our FarmOp loan products are built with the modern producer in-mind. We’re focused on the performance of an operation and how we can help increase those efficiencies.
For more information, fill out this form and we’d be happy to discuss.