In today’s agricultural market, securing the right financing can make all the difference. 

 When a multigenerational farming family in Arizona faced pressure from their existing lender to quickly refinance a maturing loan, they needed a solution that would provide financial flexibility without forcing them into a rushed sale. Learn how they found a solution through AgAmerica’s innovative financing options. 

The Challenge 

With the older generation retired from farming and the younger generation focused on off-farm careers, a dairy farm family sought a short-term tenant while preparing for the sale. After more than 50 years in the business, they had built significant equity in their real estate. However, the lease income being received could not service their remaining mortgage payments.  Unfortunately, this led their bank to pressure them to liquidate the property for significantly less than the market value of the property, just so they could pay down their loan. With limited operational income, the landowner sought an alternative option that would provide them with the time they needed to wait for the right deal. 

The Solution 

Understanding the full scope of their situation and goal to maximize the sales price of their family’s most valuable asset, AgAmerica was able to provide a $6.5MM alternative loan with a customized Payment-in-Kind (PIK) loan structure that eliminated the need for cash interest payments until the property sold. This allowed them to avoid a rushed transaction and sell the property for market value. Secured by a first-position mortgage on the property, the loan provided breathing room to complete negotiations on their terms while ensuring financial stability. Because of this, they were able to secure a sales contract with a reputable buyer at a price that set their family up for financial security for many years to come. 

Need to secure your farm’s financial future? Speak with one of our land loan experts to explore your options today.

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