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Honored Advisor

Re: Your banker has a business to run

But in banker defense.......... this usually happens when the farmer has no answers .......... and often the banker is trying to help get the farm through this temporary problem...

There are just times when there are no good answers, and when those times occur you better have him on board with you.. You do whether you think you do or not...  Smiley Happy

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Senior Contributor

Re: Your banker has a business to run

The farmer has the right to make his own management decisions. The Banker has the right to determine if he will continue to be your lender. So if he makes " suggestions" it may not be in be in your best interests.

 

That is why it is so important to keep your business financially sound or better yet become self financing. It is not a good idea to speculate with someone elses money. And that is exactly what you are doing when you hold physical grain with the banks money involved. Having said that, it is different if your loans are adequately secured but then you and I don't get to decide that. It's lenders money that is at risk and they decide. If you think banker is wrong, you best replace him with someone that respects your judgement.

 

I know one time I wanted to buy my first 80. My banker told me that I wasn't ready for that ($700 per acre).  I took his advice and didn't buy. The truth of the matter was that he wasn't ready for that. So rather than seeking a different lender, I yielded to his opinion. That was my error not his.

 

But then hindsight is always better.

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Highlighted
Frequent Contributor

Re: Your banker has a business to run

I have changed lenders 5 times in a 28 year career. When they staring telling me how to run my farm, I head for the front door. They always ask me to come back, but I never have. Better to cross the bridge and not look back.

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Veteran Advisor

Re: Your banker has a business to run

The difficulty for the banker is in deciding how 'temporary' they think the problem might be, deciding how far they might go to see it turned around (and what conditions they place on the financing provided in the meantime), or if the bank should get out now.  Unless you own the bank, don't assume that the bank is going to be your 'friend thru thick and thin'. 

 

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