Lesson Learned: Cash Buyers Have More Power

TINSTAFL.

Or, there is no such thing as a free lunch.

It’s a basic economic principal left in the minds of students in entry-level business courses all over the country. We’d like to introduce you to another concept: TINSTAFF. There is No Such Thing as Free Financing.

Plenty of farms depend on their input suppliers for financing. It’s been part of how finances are managed for years. But, the opportunity cost of getting your inputs the same place as your financing is often hidden behind the marketing.

We see this challenge with farm operations across our 19-state lending region. Farmers working with the same coop for years, receiving what they believe to be free financing.

When we work with prospective customers, we dig deeper into their operating expenses. Not to tell them how to farm. Rather, to understand their business mindset. We often uncover one thing: farmers with free financing are paying more for their inputs than they should.

We recently had a prospective customer, now an actual customer, go back to his coop and ask about upfront, cash pricing. The result would have amazed even the biggest skeptic. He saved more than $100,000 on the spot.

While everyone’s situation is different, this example is one of many on how farmers save money as cash buyers. As a lender, we’re fiscally conservative by nature and we want to help farmers find efficiencies in their costs of production as much as possible.

Are you looking to find more efficiency in your costs? Contact us by filling out this form and you’ll hear from us shortly.

Rick Snyder
VP Sales & Marketing