Meeting With Your Lender

Many business owners feel a sense of anxiety when they have a meeting with a lender. Make sure you’re properly prepared, and some of that should be alleviated. AgStar’s Joel Larson addressed this topic in a recent blog post. Instead of viewing it as a stressful experience, Larson suggests “thinking of it as a way to update your lender on your operation and tell your story.” He recommends preparing the following documents before your meeting:

• Updated financial statement:
  • Make sure you have verified its accuracy, including all cash balances, inventories – priced and not priced – and accounts receivable.
  • Include detailed machinery, vehicle, buildings, land and investment assets. It may be a good idea to review your depreciation schedule to make sure you haven’t missed anything.
  • Make a complete list of all your liabilities, including accounts payable and current loan balances with interest rate, payment amount, and due date. Consider providing an estimate of expected income tax payments to provide a more holistic picture.
• Year-to-date income & expense information
• Production Information
• Cash flow Projections

A lender will also be interested in your risk management strategy:

• How do you deal with risk in your operation?
• Do you have adequate levels of crop insurance, property & casualty, and life insurance?

For more suggestions from Larson, see the full article.