Non Equity Farmer

[AlbertaFarmer5]

When I got my first land mortgage, I was barely out of school, all I had to provide was a letter from my employer stating that I had a job as long as I wanted it. No collateral, no co sign, no business plan, no proof of crop insurance. I wasn't even aware of any of the young farmer programs, and have never dealt with FCC or AFSC. Paid down, or paid off the first mortgages very fast, and from then on, used the equity in existing land as collateral for future mortgages.

[AlbertaFarmer5]

The industry is in trouble if skilled farmers are told to take a hike.....young guys that will be good farmers are never given the chance.....

I agree, the industry, and society in general is missing so many potential opportunities from young and ambitious outside the box thinkers, all because the only skill set that will is required to go farming now is hereditary. I refuse to believe that just because your great grandfather worked really hard ( and smart), and took the right risks, sacrificed, and built a successful farm; that you are magically going to be the best candidate to run that business today. But we won't allow anyone else to even get a foot in the door to find out.

[SASKFARMER]

In every aspect of life you need to own something to be able to borrow money.

[Sheepwheat]

In every aspect of life you need to own something to be able to borrow money.

And even if you own things worth twelve times the ask, you still need income tax proof that you can repay. Even on a little loan. And that was just what I offered. Loan would have been for an amount about .5 % of my equity. No dice.

[LEP]

And even if you own things worth twelve times the ask, you still need income tax proof that you can repay. Even on a little loan. And that was just what I offered. Loan would have been for an amount about .5 % of my equity. No dice.

You say it was a small loan, .5% of your equity, but you didn't want to show the information on the whole operation. That was the issue. I have done several ventures , some small some bigger. But when I apply for credit it is always backed by the full picture of my operation.

If you wont share the whole picture don't expect them to feel real comfortable with you.

[Sheepwheat]

J

You say it was a small loan, .5% of your equity, but you didn't want to show the information on the whole operation. That was the issue. I have done several ventures , some small some bigger. But when I apply for credit it is always backed by the full picture of my operation.

If you wont share the whole picture don't expect them to feel real comfortable with you.

Well I offered them 12 to one equity. I offered them projected revenue, past revenue, a long term business plan, off farm income. They balked when I projected 350 to 400 dollars a lamb produced. No one sells lambs for that! Here are the market prices they said. I showed them proof that we do sell lambs for that. Well but what if the price goes down? Well, it doesn’t because I control the price I said. They could not wrap their head around this, so I see part of the problem being that in spite of what they say, they are only here to offer big loans to commercial, commodity producing farms. Farms that farm their way, their style, farms that are in hyper growth mode like the kid growing to 5000 acres in a few years. And only then if they are well heeled or have tremendous off farm income, or are co signed for. I think your right in why they said no. I see it as a lazy excuse to stifle new ideas that can change agriculture. But it still mystifies me as to how they have young farmers loans, women’s loans, 123 grow loans, Interest only loans for years. But when push comes to shove, they don’t helps stimulate new growth. They only help well healed growth. I get it to an extent. But I don’t to a large extent as well. Helps me understand the young neighbour's better though! Lol

Thankfully I don’t really care. We never needed the loan that badly I just mainly wanted our new company/business to have a credit history on its own, as it comes in quite handy for a lot of reasons. I am not a firm believer in envelope filing, or big pot filing. I want to track each entity and track them accurately and well. I guess I thought they would understand this??? I am 43 now. A proven track record of survival through some awfully lean years. I am certainly not going to ask my relatives to co-sign a loan. Even if this is the general course of action. So we pinched pennies and paid our own way.

Ahh farming!

[Marusko]

Own ZERO acres... Absolutely no way I can even begin to afford going rate around here.

Went to work in the patch right out of university, and started trying to save up to buy a few quarters. 1 opportunity came up in the 5 years I was working. I offered 25% above market on 3/4's and was BTFO by an outside investor.

There have been exactly ZERO other opportunities since then... Some land has traded hands, but it has been sold to long term renters of said land who are rather well healed and there is absolutely ZERO benefit to me long term to get into a bidding war on dirt they were renting.

Since then, land has appreciated somewhere in the neighborhood of 300%. Only avenue available for me to farm was to rent. Those that I've been renting off of, have ZERO desire to sell as they see nowhere for land prices to go but UP, so why not rent in the meantime and let their descendants decide whether to hold the asset or liquidate it.

That's rough. I'd be uncomfortable with rent only operation - I've always seen land ownership as the ultimate goal, providing stability and collateral, and a retirement plan. On retirement, what's your long-term plan? If you're not paying principal payments to have paid-off land some day, are you socking away money into investments, or just building cash? Hopefully you've been profitable enough lately to save beyond living expenses.

In hindsight, would you have bought land elsewhere just to have something? Like Jazz mentioned earlier, buy land far away and rent it out.

[jazz]

Helmsdale, owning at least home quarter is an absolute must if you are an active farmer. The security protection and land owner rights associated with that piece of land are huge and can be conferred to your decendents.

Nobody in Canada can f with your home quarter, not the bank, not the govt, not the protestors, not the natives. And your children can get the same protections if they decide to live there as well.

[foragefarmer]

I have taken out numerous loans and mortgages and have never had any problems getting them, as I always provided the information the lender required. If I'm not mistaken I'm going to them to borrow money.

I had solid business plans and the collateral right from the beginning which made it a bit easier every time.

I agree with lenders 100% on their borrowing requirements. The rules apply to everyone. I sure as shit don't want them lending out money to some pie in the sky business plan, because in the end lenders do get their money back to make up for bad loans and it comes out of the pockets those who full fill their obligations.

[jazz]

Sheep with respect, you may have gone about your lending application backwards. Always use an established business to fund a new venture. You wanted to keep your grain biz seperate and expand your other side with a more risky venture. You might be able to sell lamb for $400, but those are iffy local markets. Your grains are being sold into a massive market with basically instant movement and visible pricing. Just like owning stocks, the market cap and liquidity of the sector matters.

I one time asked the bank for a million dollar credit line to put in the stock market. banker was rolling on the floor. Shouldn't have told him what it was for.

[Sheepwheat]

I have taken out numerous loans and mortgages and have never had any problems getting them, as I always provided the information the lender required. If I'm not mistaken I'm going to them to borrow money.

I had solid business plans and the collateral right from the beginning which made it a bit easier every time.

I agree with lenders 100% on their borrowing requirements. The rules apply to everyone. I sure as shit don't want them lending out money to some pie in the sky business plan, because in the end lenders do get their money back to make up for bad loans and it comes out of the pockets those who full fill their obligations.

Wow, that was so encouraging. Pie in the sky business plan? Wow.

[helmsdale]

Helmsdale, owning at least home quarter is an absolute must if you are an active farmer. The security protection and land owner rights associated with that piece of land are huge and can be conferred to your decendents.

Nobody in Canada can f with your home quarter, not the bank, not the govt, not the protestors, not the natives. And your children can get the same protections if they decide to live there as well.

Working on it...