2020 Fall Farm Outlook

PAGE 12 2020 Logan County Farm Outlook LINCOLN DAILY NEWS October 28, 2020 With younger farmers in their 20s to 40s, Irwin said, they may not have as much working capital or flexibility to restructure their balance sheets. They may also be paying more interest on loans. Before deciding to consult with a bank about financing, there are some issues to consider. In “Are You Successfully Managing Farm Debt?” Shawn Williamson says you should consider the following questions: Where can you get the best rates? Should you choose long-term or short-term financing? Fixed rates or floating rates? What should you put up as collateral? Which loans should be paid off first? How much debt is too much? If you need a loan, Williamson says you should explore all financing options. Farm Credit Services, local banks, national banks, and international banks are some of the places you can get financing. Figure out how to get the lowest interest rates and what to use as collateral. Another option is a home equity line of credit. This line of credit can be useful as a source for emergency funding. Scott Anderson provides more ways to ease your financial load in “Six steps to ease the burden of debt.” One way is to go to your local bank or Farm Service Agency to discuss lower interest rates for refinancing. To assist with cash flow, Anderson says you should “extend the terms of the loan out as long as possible.” If you have assets such as augers or other equipment you are no longer using, sell it and make some money. If you have extra space in your shop, consider renting space to friends and neighbors who may need more storage. Since you only use farm equipment a couple months a year, Anderson says you could “rent out any unused machinery to help make the payments.” CONTINUE X