In today’s rapidly evolving agricultural landscape, the combination of stability and flexibility is key to sustaining long-term success.  

This second-generation farmer built on his father’s legacy over the years and dreamed of passing it on to his two adult children. But in the current market, he also recognized the need to adapt his financial strategy to support future growth. Learn how he was able to simplify the operation’s existing financial structure and pave the way for a more predictable income stream and a resilient business model. 

The Challenge 

A long-standing farming operation in North Carolina was managed by a second-generation farmer with decades of experience producing crops such as soybeans, wheat, tobacco, sweet potatoes, and peanuts. Following the closing of a $2.5MM accelerated land loan through AgAmerica back in 2024 that helped pay off legacy real estate and operating debt, his next goal was to shift from intensive production agriculture to a more stable rental model. The challenge was that the existing financial framework of his operation was complicated, involving multiple farming entities and several personal guarantors. As the family shifted focus toward renting out their owned farmland for a consistent income stream and reduced market exposure, he sought to simplify the obligor structure by consolidating all farming entities while limiting personal guarantees to just one key individual. 

The Solution 

AgAmerica was able to quickly tackle the challenge and provide a customized loan package that was comprised of a 10-year $2MM revolving line of credit (RLOC) and a $1.8MM VRM loan. Proceeds from the term loan were used to refinance the existing conventional mortgage, while the flexible RLOC provided funding for future real estate acquisitions while also supporting ongoing operating capital needs. This solution not only simplified the obligor structure but also aligned with the strategic shift toward a rental model, designating a single personal guarantor for enhanced clarity and reduced risk. 

Not only that, but this new financial structure allowed the borrowers to lower their interest rate by 85 basis points over an eight-month period. By understanding their unique goals and optimizing their financial structure, the borrowers were able to better position themselves for stable long-term growth and future real estate investments.  

Need to simplify your existing debt or secure flexible operating capital? Contact us today to see if we can help. 

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