Business is all about relationships. One key member of your team is your lender. How do you and your lender work together to overcome continued financial stress? Here are several strategies to help this relationship thrive.
Treat Your Lender As a Partner
“Your lender should be an indispensable partner who helps grow your operation,” says Jessica Lehman, managing director of agribusiness banking, First Financial Bank in Fort Wayne, Ind. “You want someone with honest, beneficial perspective.”
Be a Good Communicator
In 2019, you might have a tough conversation with your lender. “Take every opportunity to communicate in a positive, proactive manner,” encourages Val Farmer, a clinical psychologist and author who has specialized in rural mental health during his 30-year career.
“Your lender should hear about your problems directly from you. Be quick to communicate openly about your situation,” he adds.
Honesty is vital during these conversations. “Trust is the cornerstone of all good relationships,” Farmer notes. “As is the case with life in general, your straightforward dealings will go a long way to putting you in good standing with your lender.”
Explore All the Options Your Bank Can Provide
In the current tough financial landscape, you might need to use new lending tools and options. Understand everything your lender can offer, Lehman encourages.
Find out your bank’s structure, limits in lending, expertise level, products, covenants, interest rates, value-added options and its dedication to the farming industry, she suggests.
“Figure out what kind of relationship you can have with that bank,” she says. “Does it match your goals? What do you want from a bank? Can you negotiate structure and rates? Advocate for your operation’s needs and understand what solutions are available.”
Check Your Emotions at the Door
“There are so many factors outside of a farmer’s control that it’s easy to feel angry, upset and frustrated,” Farmer says. “The hard work of farming and ranching isn’t always rewarded.”
However, taking out your frustrations on your lender won’t make the situation better. “Your lending institution is trying to survive in the same environment,” he says.
If you become frustrated, ask to take a break. Use good body language (lean forward and make eye contact and welcoming facial expressions) to show you’re listening. Be respectful and stay focused on your farm’s numbers and goals.
Ask for Honest and Constructive Input From Your Lender
Ag bankers have a front-row seat to numerous farms. This distinct vantage point can help you improve your farm business, explains Alan Hoskins, president and CEO of American Farm Mortgage & Financial Services.
“Ask your lender to give you some guidance and thoughts on how you can ensure the success of your operation,” he says