Bridge Loans Help a Hot Real Estate Market

The mining company Ur-Energy announced recently that it had secured a $5 million bridge loan to help it begin a new project. The concept might seem complicated to the novice, but the company will use the bridge loan to pay for the initial work on a $34 million project. Once the facility is nearing completion, the company can take out a longer-term loan and pay off the initial bridge loan.

The story serves to underline the fact that the real estate market is hot again. More and more, people and companies are using bridge loans to make quick purchases or to start work on projects with the intention of getting longer-term funding later.

Basically bridge loans are short-term loans that last anywhere from two weeks to a couple years. Interest rates may be higher than traditional lending, but documentation is low and turnaround time for AgAmerica Lending bridge loans is lightening fast.

In the Sunshine State, contractors and builders have been using Florida bridge loans for years. Once the plan is fully entitled, the developer can use a longer-term loan to pay off the bridge loan.

Businesses with multiple partners also use bridge loans when one of the equity partners wants to leave. The rest of the partners can take out a bridge loan to buy out the partner who’s leaving. Then the firm can pay off the bridge loan when a new partner buys in.

If you’re interested in learning more about bridge lending, call us here at AgAmerica Lending, where we can work together to see if it’s right for your needs.

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AgAmerica Lending Founders Predicted Real Estate Changes

Last year, Florida Trend magazine did a great profile of AgAmerica Lending founders Brian Philpot and Rob Harper. It was fun seeing coworkers highlighted so nicely in print, but more than that, it gave them credit where credit is due for predicting trends in the market.

The article, by Amy Keller, explained how Brian and Rob bought up 350,000 acres across the Southeast, mostly of timberland. In 2004, they noticed that acreage prices had skyrocketed, and they figured the market was in a bubble.

By the time the market crashed in 2007, Brian and Rob had sold off all but 13,000 acres of the land, protecting themselves against big losses.

The crisis that followed made it difficult to acquire agriculture loans, so Brian and Rob turned their attention to ag loans. They used their own experiences in land purchases to build AAmerica Lending into a company that understands its clients.

Now, the market has turned around, and investors have returned, creating a run on ag lending and timberland loans. It has been a decade since farmland has been selling as fast as it is today, and that’s increasing the need for commercial farm loans.

For those worried about stepping back into the market for ag land, AgAmerica Lending offers personalized service for each of our customers. We’ll walk you through every aspect of a hard-money loan, farm credit, or an AgAmerica low-interest loan.

Brian and Rob instilled their company with the knowledge they gained riding the real estate wave. Now let us help you stay ahead of the curve.

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Land Values Rise as Investors and Traditional Buyers Return to the Market

The newspaper in Kalamazoo had a story the other day that offered some good news. Land values in Michigan’s Allegan County had not only found the floor of the market but had seen an increase last year for the first time since 2009. The reason? An across-the-board increase in agricultural land values.

It’s a story repeated in most spots across the country, and especially here in Florida. Values on timberland, development land, or just opportunistic deals are on the rise.

Consider that the Rural Main Street Index, one the best indicators of the health of land values, has seen a positive farmland price index for 41 consecutive months. That’s an indicator tracking values in a 10-state region. Those positive numbers reflect good buying conditions in most markets.

Farmers make up a portion of the buyers, but investors are more and more seeing a value in development parcels, timberland, and farmland. The return of investors is a good sign that it’s time to buy before prices continue to rise.

At AgAmerica Lending, we have more than 80 years combined experience with everything from citrus loans to ranch financing to hard-money farm loans. We have worked on projects from $100,000 to $100 million. We have specialists on staff that can help farmers and investors find lands. We know the ins and outs because we’ve invested in hundreds of thousands of acres ourselves.

AgAmerica Lending is institutionally funded and will consider loans from $100,000 to $100 million. The specific parameters depend upon whether the type of loan sought is secured by real estate, title, or some other type of collateral.

So if you’re looking for anything from a traditional collateral-based loan to a consumer loan, we will work with you to make sure you have a structured plan that fits your goals.

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Record Prices and Low Debt Ratios Spur Increase in Farm Loans

The news in farm lending these days has been nothing but rosy. Reuters reported recently that Ag loans are up 14 percent to almost $82 billion last year. That’s remarkable considering the historic drought that struck much of the country and speaks volumes to the good times we’re seeing in agriculture.

Last year, farmers saw cash income of $133 billion, according to the Department of Agriculture. Those projections were at near-record levels thanks to high commodity prices at market and an increase in a demand for food globally – all good things for those in agriculture.

Even with all that lending last year, balance sheets remain strong. Farm debt-to-asset ratios are expected to fall 40 points this year to just 10.2 percent. This would be a record for farm credit and supports the idea that these high profit margins will continue.

For anyone who might have gotten lost with all those statistics, here’s the boiled-down version: High agriculture profits without a lot of debt mean good times for farmers.

This also means it’s a good time for farm operations to grow. Times of high profits and low debt mean farms can take on new agriculture loans to add acreage or buy equipment. At AgAmerica Lending, we employ experts at helping farmers plan for expansion. We’ll help you develop a strategy and come up with Ag loan options to succeed at your goals.

For many farms, the best option is with AgAmerica loans, a program that competes with and often beats all other farm loan rates. For others, it’s a hard-money loan based on collateral. And some may choose an equity line where you can take out money as your operation grows.

Whichever you choose, you can take comfort in knowing now is the time to grow. With record profits and low debt ratios, there has never been a better time to be in agriculture.

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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 AgAmerica Lending 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 AgAmerica Lending typically require far less paperwork and red tape than government farm loans or other agricultural loan programs.

At AgAmerica Lending, 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.

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Here’s What Female Farmers Need to Know About Lending

There was a story in the USA Today recently that might come as a surprise to some in the world of farming. It said that the number of women farmers has increased dramatically in the past decade. This isn’t just wives or daughters of farmers but women who have decided to take on farm operations of their own.

In fact, women farmers have increased 19 percent since 2002, while the number of farmers overall grew by just 7 percent, according to the USDA. In places like Iowa, women now make up 20 percent of all farmers.

Some of these farmers took over the operation after they outlived their fathers or husbands, but more and more, women are choosing to enter farming on their own.

No matter how they enter the industry, women farmers should know what’s available to them in the form of agricultural loans that could help their operations grow.

First and foremost is the AgAmerica Conventional Real Estate Loans, which offer extremely low financing and are as competitive as anything in ag lending, including government farm loans. AgAmerica loans come with several options, including a 25-year fully amortized loan and a 10-year AgEquity Revolving Line of Credit.

Women farmers who are new to ag lending may also want to consider the Transitional Lending program from AgAmerica Lending. These loans are often called “hard money” loans and are based on collateral. These are ideal for, say, new ranch financing to buy grazing land, or as a citrus loan to buy new groves. They can also be used as a hobby farm loan for someone looking to buy a new four-wheeler for the grandkids or a new boat for the weekends.

It may also be important to women farmers who are new to ag lending to look for a banker who strives to make a personal connection with clients. Here at AgAmerica Lending, we approach every farm loan refinancing or new hard money loan or any other type of loan as a chance to develop a relationship with a client we hope to keep for life. Whether you’re a female or a male farmer, here at AgAmerica Lending, we’re going to give you that personal approach we hope will become a long-lasting relationship.

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Is Converting a Farm to Organic Worth the Costs?

There was a time not long ago when organic farming seemed like a new experiment for American farmers. Back in 1990, organic food and beverages grossed just $1 billion in sales. Twenty years later, that number has grown to nearly $27 billion. A whopping 4.8 million acres in the United States have now been dedicated to organic farming.

Farmers who have switched to organic production have seen big increases in the value of goods at market. A head-to-head comparison by the USDA found a wide difference in the cost of organic produce, from a 39 percent increase for carrots to a 200 percent markup on eggs.

Converting a farm to organic has several associated costs, including a yearly certification and increased labor expenses for weeding. Farms also must spend three years operating without chemicals before they can be certified. That can be costly considering crops sold during the switch can’t be labeled as certified organic.

Luckily, there are several agricultural loans that can help farms with an organic conversion. Low-interest AgAmerica loans fromAgAmerica Lending can provide a 25-year amortized program to help farmers pay back their conversion costs slowly, without a big hit to the wallet all at once. Or there’s the 10-year AgEquity Revolving Line of Credit, with rates as low as 2.69 percent.

Others may want to cover the costs of an organic conversion by refinancing an existing ag loan or USDA loan. By taking out equity during refinancing, a farm can cover the operational costs of an organic conversion and then benefit later from the increased profits.

What does a farmer stand to gain from organics? Carmen Fernholz, an organic research coordinator for the University of Minnesota, recently gave a presentation at the 24th annual Organic Farming Conference in Wisconsin. Fernholz is a longtime organic farmer himself. Among the costs of conversion, Fernholz said, are an initial investment of $5,000 to $10,000 for weed management that will be repaid simply in the money farmers save on fertilizer.

“It’s easier to achieve a profitable bottom line, if you do it correctly,” Fernholz said, according to an article from the LaCrosse Tribune. “You can get comparable yields, generally at more of a premium, and generally with less of a capital investment.”

If you’re thinking about converting your farm to organic, please call our loan specialists at AgAmerica Lending to talk about ways we can help you get there. You can reach us toll free at 844-516-8176.

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Ag Lending With Options: How Bankers South Tailors Loans to the Needs of the Ag Community

By Dale M. Johnson

While growing up in DeSoto County, my dad had a saying about paying back a loan, “You can always pay more if you can, but they frown on you if you want to pay less.”

I thought of that saying when I recently came on board as the senior vice president at AgAmerica Lending. Most lenders have loan programs with rigid payment schedules and lines of credit with few options. AtAgAmerica Lending, we feel as though we are on the same team as the client and continually look for alternate ways to meet their financing goals.

Our AgAmerica “conventional” financing program is really second to none. Our programs are structured with the farmer and rancher in mind. Our 15-year balloon loans, with a 25-year amortization, are structured so that once the loan closes the client does not have to worry about going through the process again for another 15 years. This is compared to most lenders who want you to come back in to rework the loan every 36 to 60 months. Our 25-year amortization means your payments are spread out evenly over 25 years. Most lenders will only spread the payments out between 10 to 20 years. Our 25-year amortization means your annual debt service will be much less.

Allowing for a lower annual debt payment allows the client to make decisions that are best for the overall operation as opposed to making a decision due to an aggressive debt repayment schedule. Another major difference is the interest rates that are available. We do not have a “floor” on our variable rate products. For example, based on this week’s rate, the interest rate on our one-month LIBOR product for those who qualify is 3.2%. There is no interest rate floor so we pass the great rate on to the client. We allow the client to choose either monthly, semi-annual or annual payments depending on which schedule works better with their operation.

Our Revolving Line of Credit program can be set up for a draw that lasts five or 10 years, and we do not require you to “rest” the loan at any time during this period. Can you imagine not having to zero out the line of credit balance over the next five or 10 years?

It all starts with a phone call. A quick call to our Lakeland office will start you well on your way.  Generally, we take your basic contact information, along with the best time to call or meet with you. A loan officer will schedule the time around your schedule. We underwrite the file in-house and then meet with you to discuss the available financing options. When you are comfortable with the terms and costs of the application, the file is submitted to an underwriter for final approval. Once we have the preliminary loan approval, we obtain title and appraisal, then move towards closing and funding your loan.

Finally, and most importantly, is that I believe AgAmerica Lending treats the client with respect by reviewing the individual’s financial information in a timely manner and being accessible for questions, comments, or suggestions, even if it is after hours.

To discuss your land loan needs, contact or at our office at 844-516-8176.

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What is a Hard Money Loan?

florida-timberland-loanA customer called AgAmerica Lending 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 AgAmerica Lending 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 AgAmerica Lending 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 844-516-8176 or write us an email at

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