Key Considerations When Choosing Your Farm Lending Partner

Hollie Bunn, Vice President of Credit, United Producers, Inc.

As livestock markets continue to fluctuate and keep even the most seasoned market analysts guessing, financing options for farm operations are more important than ever before – and ensuring that you have the right lending partner by your side can literally make or break your farming operation. Having spent my entire career in ag lending, I have found three key factors to consider when selecting the right lending partner for your livestock operation:

Is your potential lending partner bringing more to the table than just financing options?

What truly makes UPI unique is that UPI is a livestock company, first and foremost. And, we provide loans because that is what our producers want and need. UPI provides the full ecosystem of the marketplace for our consumers – who are our members/owners. We are there and can help with every aspect – from identifying and purchasing livestock through marketing the animals for processing and everything in between. That’s where UPI Credit Services comes in – providing the financing options needed at any step in that process. And that’s what makes us so unique – we’re not just walking the pasture or feedlot with our customers – we’re actually helping to keep it full with quality stock, get strong prices for the finished livestock, and then fill it up again – the full cycle. Our driving question is, “Where do you want to be and how can we help them get there?” rather than simply “What financing do you need?”

Does your lender have innovative credit services solutions that offer benefits for you, such as cost-savings, tax breaks and the freedom to invest in what you truly need?

The answer to this can vary, depending on your needs for lines of credit that keep up with current livestock prices or fixed-rate loan options for facilities. Additionally, you need to ask yourself if your lender is being creative and innovative with lending options that perhaps you have never considered. For example, one of UPI’s newest solutions-driven outcomes is our Flexible Farm Leasing Program with 100% financing and tax benefits. Leasing can offer tremendous tax benefits that put money back in our members’ pockets. Depending upon your financial situation, an entire lease payment can be tax-deductible, not just the interest.** As you know, on-farm grain storage provides flexibility for your operation, which can increase profitability. So, if you need a grain bin, farm shop or cattle barn, or even equipment, leasing might be a great option for you. You can keep your mortgage in place and your low interest rate intact, allowing you to expand operations without paying more interest on your existing mortgage. Leases can work alongside your existing or new lines of credit and existing or new loans.

Does your loan officer intimately know agriculture? Are they farmers?

It serves you well to find an expert in whatever arena you’re in to ask for advice and be confident in their direction. Does your loan officer intimately know agriculture, or, better yet, are they a farmer? There are a lot of lenders who are involved in agri-business, but it is a lot different to talk to a fellow livestock farmer about your operational needs. In addition to our employees’ individual experiences, UPI is the culmination of nearly 100 years of listening to farmers, hearing their challenges, and designing our services to give them the best possible chance of success. Our cooperative is governed by farmers who guide the decisions, innovations and services we provide. Much like you have inherited generational farming operations knowledge from your family or mentors over the years, UPI brings generational financial and lending knowledge to your farm.

Checking the boxes

If you can check all three of these boxes, then you’ve found a great fit for your farm’s financial partner. If you can’t, consider that UPI checks all three of these boxes. We’re a livestock company who makes loans and leases, not the other way around, offering the full spectrum of ag – livestock marketing, risk management and credit services. While our members don’t actively have to be involved in livestock to get a loan from us, those who are have found the trusted partner they need. And, when you work with an ag financing entity who truly understands the market, we  provide overall financing packages that will exceed your expectations.

As your ag lending partner since 1932, UPI offers a livestock marketing and risk management lens to its members that gives them an edge in the market through solutions-driven outcomes. You can trust us to help you find a solution that will support your farm’s viability now and into the future. Contact one of our experienced loan officers today to start discussing your needs or learn more at www.uproducers.com/credit-services.

** Content should NOT be construed as personal tax advice.  Always consult a CPA or tax specialist regarding tax deductions.