Low farm income is driving a need for capital, but existing debt is hindering farmers. 

The agriculture industry’s average debt has risen 8.5 percent since 2017. With net farm income expected to decline, many farmers are seeking a boost in capital to manage risk. But it can be challenging for operators to secure financing when they have existing debt inflating their current ratio. AgAmerica’s customizable loan structure helps farmers access the funds they need to build financial resilience. 

The Challenge 

A farm family in Virginia wanted to accomplish several projects on their vineyard. Firstly, they wanted to convert some of their existing land to vineyards and expand their operation. They were also planning to build a wine tasting area and a store on the property that could attract visitors and generate agritourism income. Finally, the family was looking to refinance their existing debt in order to free up funding for these projects as well as additional operating expenses.  

Their existing loan would make it challenging for them to balance their debt-to-asset ratio enough to secure financing. In order to refinance, they needed a lender that was willing to look at the full context of their operation and understand their potential for success.  

The Solution 

The farm family reached out to AgAmerica for help. We immediately saw the value in their operation and worked with them to consider their off-farm income during underwriting. AgAmerica created a custom $387,000 loan package for the family that would allow them to refinance their existing loan with a cash-out amount of $76,000 to fund their upcoming projects and operating expenses.