Does that headline really say “managing my loan officer”? Wow, that can’t be right. In reality it is a gift, and here’s how you get your credit work done the way you want it.
First, give the gift of time, which really is a gift here. Time gives the loan officer the ability to get the analysis correct, which leads to getting the best product back to you. The best product will include the correct structure for the credit request with payment terms that match your cash flow and timing. If the request is rushed into completion and there isn’t time for discussion on the background of the loan request, the terms that work best for you may be missed and can create unnecessary work and stress when the time for payment is realized in the future.
Second, have a plan. A plan can take several forms. It can be your cropping plan for the upcoming year, including acres of each crop, target yields, target price and may even include some breakeven prices.
Another plan could include capital purchases. This could consist of a short term 12-month needs list for the upcoming year along with a long-term plan on where you see capital needs in the next three to five years. If you do make a plan such as this, be sure it’s updated on an annual basis as cropping systems and livestock needs change. If we look back to when the first vertical tillage tool came out, I think most capital plans the following year included one in their wish list.
The third key here is to have a good story to tell your loan officer. Now, I don’t mean a fairy tail story, but the real story behind why it makes sense for AgCountry to finance your credit request. Often times, when a request for a machinery purchase is made, it may not make financial sense until the full details of the purchase are disclosed.
Here’s an example: Let’s say you’ve been hiring out someone to do custom work along with rental equipment. You decided instead to buy a machine or two of your own. This may not make a lot of sense at first. However, you demonstrate to your loan officer that there are improvements to cash flow when the purchase eliminated the hired expenses.
What has been laid out here may not sound like anything that is new or groundbreaking. However, from the lenders side of the desk, it’s surprising how many financing requests come in with minimal or no planning. You really can help yourself by following these three simple tips to make sure your credit request is done correctly. Time isn’t always on our side. We all know that things come up and we have to act, but if your contacting your loan officer only with emergencies, you may have to adjust your timeframe. This ties into having a plan - one that anticipates financing and addresses the need. The final part of managing your loan officer is to have a good story to tell that backs up the request. This behind-the-scenes look you give really is essential to telling the story we need for your approval narrative.