When I was in junior high, my mom drove a big and ugly brown-and-red Ford Econoline van. The minivans my friends’ moms drove didn’t fit everyone in my family—because I grew up with enough siblings to field a basketball team. When one player went to town, so did the whole team. Despite the lack of style (this van was ugly), mom and dad kept their group in one place. If something was going on, we all knew about it, and we all used the van time to talk about it.
Think about how and when you communicate on the farm. When your farm team is talking, are all the key players present? During the recent Top Producer Summit, I moderated a panel of finance experts during the Executive Women in Agriculture (EWA) event. The group included K•Coe Isom’s Kala Jenkins, First Financial Bank’s Jessica Lehman and Farm Credit Services of America’s Angie Treptow.
They reminded me of how important it is to not label team members in name only, especially during tighter financial times. While the audience was mostly women, panelists urged the group to look around the operation at anyone who plays a current or emerging critical role in the business and make certain they are building relationships with their financial professionals.
Women are often sought to be the glue in the fabric of families, and the panelists reminded attendees to use that role to either take their rightful seat in discussions or insist younger generations be present to learn. When the right players from your team are at the table with your financial advisers, the whole team wins. Here are a handful of the key strategies they shared for farm financial discussions.
1. Fewer banks in your rural area put pressure on grower-lender relationships. Banks are consolidating just like other entities in agriculture, leaving many rural counties without a local branch. This means relationships with lenders are different than a generation ago. So, if your operation is fortunate enough to have a long-standing relationship, that knowledge transfer to younger generations is critical. It’s also important lenders know who they can talk to in the business, so they take spouses and younger operators seriously in the event there is a problem.
2. There are and will be more and more non-ag, ag bankers. While the EWA panelists were all from our industry, each admitted to having to educate their lending peers. Today, we cannot assume lenders understand farming. Women can own a role of advocacy for the operation by speaking up and asking if the lender has any questions or needs more information to understand a particular line of business, but just sharing details isn’t enough. Panelists say documentation is how you really capture a lender’s attention. Use your organizational and show-and-tell skills.
3. Yes, you can use alternative lending sources. We covered it all at EWA, and the panelists didn’t shy away from talking about alternative financing, including credit card financing for products and other vendor-financing services. The panelists agreed these can be useful in the short term, especially if a grower is seeking to get back on track. The key is to quit hiding it. If you are using a vendor-supplied card, it belongs on your balance sheet. Panelists urged producers to adopt a “use it and lose it” policy after their short-term financial goal is met.
4. Be comfortable with your banker and give challenging relationships another chance. Debunking the oft-held belief going to the bank is less fun than going to the dentist, one EWA panelist challenged the audience when she asked: How can a lender be a partner in business if the grower doesn’t ever want to talk? Financial advisers should not be adversaries. Sometimes relationships can go awry with a personnel change. Before moving to a new lender, consider giving that relationship another chance.
Read seven more timely financial tips shared during the EWA panel at bit.ly/7-finance-tips
Sarah Beth Aubrey’s mission is to enhance success and profitability in agriculture by building capacity in people. She strives to foster that potential through one-on-one executive coaching, facilitating peer groups and leading boards through change-based planning initiatives. Visit her at SarahBethAubrey.com, and read her blog, The Farm CEO Coach, at AgWeb.com.