Bulletin E-3407: How to Motivate Your Lender to Say, “Yes”DOWNLOAD FILE
July 31, 2019 - Author: Jonathan LaPorte, Michigan State University Extension
Making your first request for a farm loan is an important moment for you as a young or beginning farmer. It’s when the whole idea of running your own business truly becomes real for you. It is something you have thought about and worked hard for a long time to achieve. You want the lender to understand and acknowledge your commitment as well as be impressed with your ideas for the farm. Simply put, you want that lender to say, “yes!” to your plan and make an investment in your farm.
Believe it or not, lenders think about their impact on a young business every time they get a loan request. They know that there is a lot more to that request than just the money being requested. Lenders want nothing more than to see these new operations be successful.
Lenders also know that newly established farms carry more risk than more established operations. This means that lenders often proceed with caution and require added assurances that the loan will be repaid. This is not only for the well-being of the lender but also for your benefit as well. They need to know that you understand all the risks involved and are prepared to assume the role of farm manager in future dealings with them. Knowing how to provide these assurances can make the loan process much easier and better ensure a “yes” to your loan request.
How can you provide assurance to the lender? MSU Extension suggests that the best place to start is by understanding the parts of the loan process and what the lender wants to see. Download the latest bulletin in the Beginning Farmers DEMaND (Developing and Educating Managers and New Decision-makers) series today to begin learning how to motivate your lender to say "yes" to your loan request.
Be sure to also check out additional bulletins in this series on the MSU Extension Farm Management website, located on the Beginning Farmers DEMaND Series page.