Opinion: Studying farms' financials key to ag loans

Jason Whitesell

I’m very fond of my childhood growing up in Ash Grove and even more proud our family owns a century farm just west of the Springfield-Branson National Airport in Bois D’Arc.

I have memories of spending many days and sometimes extended weekends at my then-grandparents’ farm as a kid. I remember once, when I was elementary age, telling my grandmother that working in the garden wasn’t hard, but it sure was boring.

I also remember telling my dad that I didn’t mind the work of putting up alfalfa square bales, but that was not what I wanted to do when I grew up.

Fast forward 30 years and those memories are what give me a great appreciation for a wonderful group of people that we have living in this country and customers that we as community bankers get to work with every day: family farmers.

In southwest Missouri, we see the hard work that farmers endure day in and day out.

Financial data
Although we may not see our customers’ operations every day like they do, agricultural lenders need to be tuned in to what is happening on their farms. It is vital to the success of the farmer as well as the success of the bank to have very strong relationships with our agricultural customers. And with all that has happened in the world around us the past year or more, these relationships have never been more important.

Whether it’s establishing a relationship with a brand-new borrower or handling the request of a longtime customer, it is critical that we collect as much relevant information from a financial standpoint to allow lenders to best help customers. It is difficult enough if some time has gone by with an existing customer and things have changed in their business or farming operation, but retrieving poor financial information makes it that much harder to assist any borrower.

As agribusiness lenders, we need all this information to allow ourselves to be a part of their operation. Even while we make our regular farm inspections to examine collateral, get updates on the farm and view firsthand the customer’s operation, this still does not give us the full picture.

By gathering the best financial data that we can, this will allow us to better prepare the bank to assist the farmer with their needs, whether that’s preparing for their current request or helping them improve the structuring of their finances to maximize the farm’s potential. It’s also a good idea to have a second set of eyes or someone from the outside looking in to help spot a change that might make a positive impact.

As bank representatives, we are tasked with protecting the bank’s assets and interests.

In doing so, we must balance the best interest of the bank while also looking out for the best interest of our customers. By obtaining useful information like current financial statements, recent tax returns, business plans and corporate documents, we gather the tools we need to develop the best game plan going forward to help our area farmers.

Relationship building
Any bank is only as successful as the customers it serves.

It’s paramount that lenders and farmers develop relationships for the long haul, partnering to ensure the success of both the financial institution and the agricultural business for years to come.

Nothing would make me happier than to see more century farms dot our landscape, giving children memories like the ones I cherish and our local economy a stability that our communities need to thrive.

Nobody has a crystal ball and can predict the future, but we can do the next best thing in studying our customers’ finances and assisting them with making the best possible financial decisions.

This is the key to agriculture lending done right.

Jason Whitesell is a vice president and commercial relationship manager at 
Guaranty Bank. He can be reached at 
jwhitesell@gbankmo.com.