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August 25, 2021

Cultivating a Strong Borrower-Lender Relationship

Developing and sustaining a positive relationship between farmer and lender is an essential part of operational success. 

Understanding the characteristics of a strong borrower-lender partnership is essential when finding a lender. When both partners share the same goal of a thriving operation, the stage is set for a mutually beneficial relationship between lender and borrower. 

Characteristics of a Good Lender 

Before discussing how to foster a successful relationship between lender and borrower, it is important to establish the signs of a good lender. Finding a good lender who is invested in the long-term success of your operation is the first step in cultivating a positive lending experience. 


When finding a lender, you should pay attention to the values and goals of the lender. Agriculture is a relationship business, and agricultural lending is no different. A supportive lender should work closely with you to develop a thorough understanding of your story, needs, strengths, and goals for the future. Through this relationship, a mutual bond of trust is created between you and your lender. 

Flexible and Adaptable Solutions 

American farmers and ranchers have unique needs that vary by geographic region, farm structure, commodity, and personal factors. Because farming isn’t a one-size-fits-all profession, customized and adaptable loan solutions are essential to meeting the needs of each operation. In essence, the dynamic nature of agriculture calls for dynamic financial solutions.  

In addition, a lender who understands the volatility of the agriculture industry can be there to celebrate your triumphs and stand with you through inevitable adversities. That’s why finding a lender capable of providing financing that can evolve with you is so beneficial. 

Industry Experts 

Agricultural lending is significantly different than other forms of lending as it requires a deep understanding of the unique needs and challenges of American farmers. While farmland is more stable than other investments, agriculture is a highly volatile industry. When a lender has personal experience in agriculture, we have more insight into how we can develop financing solutions that meet both your short-term and long-term goals. We also understand that factors outside of your control often impact your operation. Our deep knowledge of the industry allows us to continually adapt our financing to help farmers withstand the external pressures of this volatile industry.  

Advocates for Agriculture  

Another characteristic of a good lender is that they are a true advocate for the American Farmer. Good agricultural lenders have a thorough appreciation for everything that farmers contribute to our nation and the world. When working with a lender who holds profound respect for your work and is committed to seeing your industry succeed, you gain a partner who supports you through thick and thin. 

Tips to Creating a Successful Borrower-Lender Relationship

After finding a lender to partner with, it is crucial to begin cultivating that relationship to reach its full potential. Building a strong relationship between you and your lender requires effective communication, transparency, and a commitment to cultivating long-term relationships. 

Be Transparent  

It is important for both farmers and lenders to practice open communication by sharing pertinent information that could affect the loan. For farmers, obstacles can unexpectedly emerge that affect the financial health of their operation. It is crucial that you let your lender know right away so they can help you strategize a plan to prevent you from falling behind on payments. It is understandable to be hesitant to share struggles, but a good lender will be supportive and understanding.  

On the other hand, it is just as important for the lender to practice transparent communication with you. From the beginning stages when the lender is getting to know you, to the stages after the loan has been closed, it is essential for lenders to communicate pertinent information to you. Important information that you may want to know includes: 

  • Amortization schedule; 
  • Required documents; 
  • Interest rates; and 
  • Estimated loan timeline. 

Lenders should strive to communicate this information in a clear and concise manner. Farmers must focus most of their energy on supporting their operations and families, so they shouldn’t have to sift through dense and disorganized information that could be presented in a concise and digestible format.  

Ask Effective Questions 

Let’s face it, financing can get complicated. Taking the initiative to ask questions is a great way to get answers and create a supportive relationship where openness and transparency are valued.  

Keep Up on Communication 

A good lender views the closing of a loan as the beginning of a long-term partnership with you. To sustain a beneficial relationship, it’s essential for you to pay attention to all communication that you receive from your lender. Communication should occur regularly to ensure that both parties are on the same page with responsibilities and are kept up to date on new information.  

Ensure Accessibility of Relevant Financial Information 

It is important to prepare and organize the financial documents required by your lender in order to develop a full picture of your unique needs. Some of these documents include the loan application and borrower’s authorization, federal tax returns, balance sheets, income statements, and income and expense forecasts. For more information on commonly required documents to apply for a loan and why they’re important, click below. 

AgAmerica: Financing the Future of American Agriculture

AgAmerica proudly stands beside American farmers and ranchers as a partner in their journey of feeding our nation. We have a profound respect for what they endure and overcome every day to provide food for the American people, and we do everything we can to make their lending experience a positive and supportive process. At AgAmerica, we are, 

  • Relationship-focused: We value the long-term relationship that we cultivate over the lifetime of a farmer’s loan. Our Client Relations department regularly checks in with clients to hear updates on their farm and ensure that their needs are met.   
  • Flexible and innovative: Our loans adapt with you through the inevitable highs and lows of farming. Our transitional loans allow farmers to move from alternative loans to conventional loans on their path to recovery. 
  • True Agvocates: Many of our AgAmericans have firsthand experience in agriculture, and all of us are passionate about getting to know American farmers and ranchers. 

To discover how a partnership with AgAmerica could help you support a thriving operation, we invite you to contact our team today. 

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