by Heather Hansen, Intermountain Farmers Association
As we welcome a new season of growth and possibilities, we recognize that there are numerous financial uncertainties that our customers sometimes face. Whether it is caused by the increased cost of commodities, the reduction in consumer spending, or governmental inflection, we should acknowledge those difficulties and emphasize our commitment to working together. Transparent and honest communication can often lead to a path of finding results. By providing actionable solutions or resources to our customers, we can say “Yes” to meet their credit requirements.
During difficult times of financial strength, we are not afforded the luxury of doing business as usual. We are creating a disservice for customers if we don’t recognize the fluctuation. This is when we should ensure open dialogue. Assessing their needs and our own willingness to accommodate those needs is an opportunity to be proactive. Although sometimes the conversation is not always easy, it can lead to building a stronger relationship with customers.
In the Agriculture industry we have had many challenges as we are also reliant on mother nature. We needed to be creative. We have tightened our Credit Policy but have also created ways to a “Yes.” One step is researching what programs are available outside of our company. I am always scouring the USDA for grants that I can recommend to my customers. We have seen great success working with them. I have also found several finance companies that we are collaborating with to provide extended financing for our customers. In our industry what is purchased in spring often doesn’t sell until fall for repayment of the debt.
CREATIVE SOLUTIONS
- Extended terms to allow the customer to maintain cashflow
- UCC Filings with an option to subordinate for approved financing
- Loan Notes – Both short-term and long-term with collateral
- Milk assignments, joint checks, bonds
- Open communication with their bank. Working together on balancing sales vs payment.
- Security Agreements or Confession of Judgments held in trust
When you can fully comprehend their needs, you can create solutions while maintaining your company’s expectation to be paid. Risk is inevitable in any industry. As black and white as we wish it could be, we are more likely to live in a gray area to manage risk. For me personally, I find this to be rewarding. By locating a path to “Yes” customers succeed, we succeed, and it facilitates the opportunity to establish trust and partnership with our customers.