Four Benefits of Cultivating Farmer-Banker Relationships

Farmer-Banker Relationship Benefit #1: Capital planning

Because of the demanding nature of agriculture, it can be easy for farmers to focus on short-term needs and overlook long-term investments. Vital equipment, such as planters or tractors, typically costs hundreds of thousands of dollars, so it’s critical to plan ahead for these major investments.

“Without taking a strategic approach, it can be easy for equipment costs to snowball out of control,” cautions Olson. “It’s important to understand your product life cycle, financing options and timeframe to finance major investments.”

Farmer-Banker Relationship Benefit #2: Managing a budget

Agriculture income is typically spread out throughout the year because of crop cycles. Additionally, income can vary based on changing yields, prices, expansions and other factors. Working with a banker to prepare a budget can help you run a profitable operation and avoid overspending.

"A budget helps create financial discipline and accountability in meeting your goals,” says Olson. “Many agricultural relationship managers understand the market cycles of your crops and can help align your cashflow with projected needs.” 

Farmer-Banker Relationship Benefit #3: Applying for agriculture loans and banking products

Given a farm’s large operating costs, access to capital is just as critical as water for your crops. Bankers play a valuable role in helping you select and apply for financial products that can meet your needs.

“Aligning your financial needs with the right product can help you save thousands of dollars and access capital when you need it,” says Olson. “For example, operating lines of credit are a useful tool for meeting seasonal cashflow needs. But for long-term investments, using term loans or equipment loans might be a better option.”

Regardless of what loan products you apply for, a knowledgeable banker can be a valuable guide. Because they understand your business, they can make personalized recommendations for products that can benefit your farm.

Farmer-Banker Relationship Benefit #4: Preparing for retirement

Because many farmers depend on their property to help fund retirement, it’s important to manage risks and develop a succession plan.

“Because farmers have large assets to sell or transfer before retiring, there’s a lot of moving parts to consider,” says Olson. “A banker can help evaluate your financial situation and loop in other professionals, such as attorneys or CPA’s, to make sure your bases are covered.” 

A trustworthy banker relationship needs to be cultivated over time

Like planting a seed, a strong banker relationship doesn’t happen overnight — it needs to be cultivated over time. But when fully developed, your connection with your banker can blossom into a fruitful relationship.  

“Farmers make a lot of sacrifices to help us put food on the table,” says Olson. “It’s gratifying to sign loan documents on the hood of my client’s pickup, with dirt on my boots, because I personally know the value farmers bring to our communities.”

From equipment financing to lines of credit to help with cash flow, Zions Bank is ready to assist with your agricultural lending* needs. Visit the Zions Bank website or your local Zions Bank branch to learn more.

*Subject to credit approval. Terms and conditions apply. See banker for details.