HELP: Drawing equity out of land due to shitty year

[Anonymous]

Long time poster, just created an anonymous account due to personal nature of this post.

This year sucked, I have to either sell land or draw equity out of my land. I currently have inputs financed through FCC but not land. Can I borrow from FCC to pay out my existing land loan with another institution but borrow more than the land loan is to get cashflow? I can pay out the FCC inputs but I'm lining up for a wreck with CCGA and other inputs. I'm currently owing 30% of the market value on this land so there is a lot of equity if I can access it.

I don't want to approach FCC until I know what is possible. I'm sure some of you are techie enough to find my IP address and figure out who I am, if so please don't share it, I already feel shitty enough...

[4GFarms]

If anybody leaks your private info that is terrible. Keep this private as everyone has had issues and a lot of pride is at stake.

Selling the land is the last option. See if you can do interest only for a year through FCC. Puts you behind for the next year but allows some breathing room without losing land base. See if any other financial institutions will give you an operating line to help with cash flow and pay bills. It might be hard if your balance sheet looks poor but does not hurt to ask. Liquidate some assets (machinery you can do without) to help generate cash flow. continue to talk to your lenders even if it is difficult. You are definately not the only one in your situation. Stay positive.

I was in a similar situation just a few years ago where I was not sure where there was going to be enough cash to pay bills but managed to increase some LOCs and scrapped by. It takes a few years of not spending to make sure everything is in order but when the next year comes there is always the opportunity to have a good crop to help you out.

[Richard5]

[QUOTE=Anonymous;332004]Long time poster, just created an anonymous account due to personal nature of this post.

This year sucked, I have to either sell land or draw equity out of my land. I currently have inputs financed through FCC but not land. Can I borrow from FCC to pay out my existing land loan with another institution but borrow more than the land loan is to get cashflow? I can pay out the FCC inputs but I'm lining up for a wreck with CCGA and other inputs. I'm currently owing 30% of the market value on this land so there is a lot of equity if I can access it.

I don't want to approach FCC until I know what is possible. I'm sure some of you are techie enough to find my IP address and figure out who I am, if so please don't share it, I already feel shitty enough...[/QUOTE

My suggestion is being up front with your creditors. I would never feel ashamed or worried about what has happened. By being up front, you will have options and solutions can be found.

Next option is your accountant. Together you can prepare a current financial statement and next years plan or at least a short term plan on how you are going to repay

[sk_wheatking]

Long time poster, just created an anonymous account due to personal nature of this post.

This year sucked, I have to either sell land or draw equity out of my land. I currently have inputs financed through FCC but not land. Can I borrow from FCC to pay out my existing land loan with another institution but borrow more than the land loan is to get cashflow? I can pay out the FCC inputs but I'm lining up for a wreck with CCGA and other inputs. I'm currently owing 30% of the market value on this land so there is a lot of equity if I can access it.

I don't want to approach FCC until I know what is possible. I'm sure some of you are techie enough to find my IP address and figure out who I am, if so please don't share it, I already feel shitty enough...

I sincerely hope that you find a solution to these issues. There are going to be many farms and families in this situation in the coming months ahead through no fault of their own. People that have worked hard had good diligence but have just had their life chewed away by unbelievably bad luck with weather conditions. These grain companies and input companies are ****ing criminals in my book too. Parasite pricks who don't give a shit about anyone in private. Just look at the canola seed price that should be all you need to see and the magnifying glasses and tweezers to check grain samples? Something has to change. The primary producer takes all the risk with little hope for return and left to the mercy of all the grain companies and financial institutions fines penalties and interest. Now I know there are bad managers out there but the majority that are going to be in trouble are good honest hard working people who have been dealing with circumstances beyond their control. It will be a tough Christmas for many. It makes me sad to think of the family's that will be affected. Meanwhile the input and grain companies will have their best year ever and some fantastic Christmas parties. They will resume dealing from the bottom of the deck Jan 2.

[farmaholic]

I erased my original draft.....

All I can say is take care of your family and yourself.

I like sk's post!

[foragefarmer]

I'm sorry to hear about your situation, I have to agree with what has been all ready posted on several points, along with it affecting hardworking family farms.

My suggestion to you is if you rent land give it up this spring if possible, sit down with lenders and let them know what is happening and have a prepared game plan as to what you are going to do to improve net cash flow. Get profession help in that regard if possible. I know the job situation is tough, but have you considered getting one if you have a certain skill set. This would apply to your spouce if there is one or if it's possible. Do you have immediate family you could call upon, I know it's hard to do, but you never know who would be willing to help.

One thing you have to remember throwing good money at bad is always risky! I don't know you, I'm just making suggestions and you don't have to worry about me, I'm not tec savvy.

It's got to be hard, but try to remain positive, and all the best.

[bucket]

Make sure you trust the person at fcc....guys were buying land that worked there based on a farmers bad luck....

[sumdumguy]

An on-farm business really helped us. If you have skills or talents, money is cheap. Do it as frugally as possible and try to utilize the resources you already have so as not to dig a deeper hole. We did it. It changed our lives and the lives of our offspring, not to minimize the fact that it enhanced the farm and gave us much flexilbility and the ability to withstand negative externalities. Just a little food for thought. Some have manufactured something, set up seed cleaning plants or repair businesses.

[mcfarms]

Depends on what your loan contract states with FCC as far as paying out your balance with a lump sum, quite often though FCC has been the lowest lender to the ag sector so your discussion needs to start with them . What you are taking about is quite feasible even just going and getting an increase on your loan from FCC as long as your balance sheet and future cash flows work. So much is going to depend on what your total debt to equity ratio is . I see a 30-70 but does that include all input, machinery and personal debt. kinda does not sound like it . Not sure where the criteria is but make an appointment have a talk and see what they can suggest its what they do.

Best of luck, hope you can figure out a solution.

[LEP]

I have to disagree with forage. Don't give up rented land or sell equipment until you have done a complete analysis.

Having a large land base cuts your per acre fixed costs. But having too much for equipment or management levels costs you money.

There is no shame in saying I can only manage properly xxxx acres. I have found that level and know that I could farm more but shouldn't.

So what you are looking for is a consolidation loan to pay out existing mortgage debt and term out short term liabilities. What you need to analyze is why you are in this situation. It may be because of wet weather etc or maybe you are needing a larger margin than we can expect from the grain markets.

I am not passing judgment, just saying. This will be a tough time but I think the lenders are still in the mood to help if the situation is viable. I worked in the industry when it didn't matter how viable you were, they were reducing ag exposure and good people got caught up wave.

If you want to private message me I will give you all the advice I can. No cost. I am sure there will be options available if you have land equity.

Like SF3 says the ones at home are the most important. Don't lose sight of that.

[riders2010]

Are there any private lenders etc that aren't loan sharks? Not something like input cap. Where do you find them
I m in same boat more or less.

[jamesb]

There is people out there that can assist you with a business plan.
First the Farm Business Development Initiative (FBDI). Through grow forward 2, provides funding to do various things like business strategy. Ken Evans in Weyburn in my local guy that oversees this.
https://fbdi.gov.sk.ca/
We have done various projects once approved .
Bob Stocks in Regina is one who maybe of value to you
http://www.bobstocks.ca/

The FBDI funding will pay in part for services of Bob Stocks and others.

[JDGreen]

I could not say it any better than LEP.. Do not give up land until you have completely analyzed the business. Listen to what LEP has said: my two cents.

[JDGreen]

Okay two cents more.. As someone else stated your looking to consolidate. Yes if you have been a straight shooter and maintained good credit ratings, paying out elsewhere and restructuring with FCC really should not be an issue if there is a history of past profitability and a good business plan presented to them.

[GDR]

I don't really have much help to offer other than wish you the best. It can be a stressful times when things are good but when they don't go like you planned it's pretty tough.

Depending on age of your existing land mortgage, pay attention to interest rates, may help the payments if it's lower now. Extending the amortization might help too.

My father had some tough times when I was a kid. He sold his cows on paper to a livestock dealer on paper then bought them back to look like a new transaction to finance. May need to do something like that other than there is way more records and paperwork on our operations today.

Good luck, chin up.