Farmers Affected by Drought Have Finance Options

If your farm has been affected by the historic drought, you’re not alone. In fact, the USDA says 80 percent of farmland was impacted by the worst drought since the 1950s.

Luckily, the government is offering help to some farmers. The USDA Disaster and Drought Assistance program is available to farmers on the hardest-hit farms, and you can click here to see if you are in the areas where financial assistance is available.

Unfortunately, some farmers affected by the drought are outside the assistance program borders. Other farmers say the government agricultural loans are too slow or require too much paperwork. That’s where Bankers South would like to step in and offer assistance. If you’re considering a hard money loan, a farm credit loan, or a farm loan refinance, we would be happy to speak about your options.

For farmers affected by the drought who aren’t covered by the USDA assistance, the first thing to consider is a loan from our AgAmerica Lending program. These are loans with flexible payment options and rates as low or lower as any in ag lending.

For commercial farm loans, you might also consider a traditional, or “hard money,” loan. Based on collateral, these loans at Bankers South typically require far less paperwork and red tape than government farm loans or other agricultural loan programs.

At Bankers South, we don’t look at loans as a one-time deal – we want to make a client for life. And if your farm has been affected by the drought, that means helping you out of this tough time and back to prosperity.


What is a Hard Money Loan?

florida_timberland_loanA customer called Bankers South not long ago with a problem. He was coming close to a foreclosure on a tract of timberland. He wanted to sell off the tract, but not under distress in a fire sale, where he might lose his shirt.

Our loan specialists had the plan to buy him some time: a hard money loan. Instead of losing the property, he had time to put it up for sale, wait for the right buyer, and was able to walk away with a profit. He was elated, not only because he retained the equity built up in the land, but also because his credit was not ruined. We were proud that he was able to get out from underneath a bad loan – and we were happy to help him stand tall in a tough situation.

Hard money lending, or private lending, is often misunderstood. Put simply, a hard money loan is an asset-based loan. Some people wrongfully believe that hard money borrowers are in financial trouble, when actually these types of loans were the original way to borrow money. In the 19th century, it was near impossible for a lender to verify a borrower’s income, so all mortgages were asset-based loans. Over the decades, as banks competed for business, lenders slowly began evaluating borrowers’ abilities to repay the debt according to their income, instead of just looking to the value of the collateral.

Nowadays, since institutional banks look more to a borrower’s ability to repay the loan and less to the asset itself, hard money lenders have a place again in the market. Hard money lenders like Bankers South are there to help not just those in financial trouble, but any borrower who has enough equity in an asset. Hard money borrowers are often stable, successful businesspeople that just happen to find themselves with a need not met by a traditional bank loan.

Some of our borrowers are in need of a short-term loan, say a few weeks or six months, to “bridge” them over to a new project or goal. Others are behind in their current payments and need a “loan buyout” from an institutional bank. We’ll often take over their loan and restructure the payments to more manageable levels. We can help our customers sell their property too, through our real estate brokerage division, Land South Realty. These hard money loans have seen our customers through the tough times, often allowing them walking money after the sale, and everybody is happy.

Our entire team at Bankers South is knowledgeable and experienced in real estate valuation. Due to this experience, loan underwriting and property appraisal are completed in a timely fashion. Depending upon the type of loan, funding can take as little as one to three weeks. If you think a hard money loan could work for you, we’re standing by to help you through the process. Contact us at 855 898-BANK or write us an email at BankersSouth@BankersSouth.com.


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