What to Know Before You Borrow Money: Key Insights from FCS Financial Experts

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Borrowing money is a significant decision that requires careful consideration and planning. In a recent webinar hosted by Madison Farnan, Marketplace Engagement Manager at FCS Financial, three experienced team members shared their insights on the essential steps and considerations before taking out a loan. The panel included Ag & Rural Lending, Vice Presidents Debbie Ragsdale and Tyler Keatts, and Vice President, Team Leader Credit, Brett Bryant, who provided valuable advice on the process, necessary documentation, and key questions to ask.

When to Reach Out to a Loan Officer

One of the first topics discussed was the timing of reaching out to a loan officer. Debbie emphasized the importance of contacting a loan officer early and often. This proactive approach allows borrowers to explore opportunities, discuss scenarios, and plan for growth. Tyler added that being realistic with your request is crucial. Understanding what you can afford and having a clear plan helps streamline the process and sets realistic expectations.

Tools and Resources for Borrowers

Brett highlighted the importance of having a plan and using available tools to understand your financial position. FCS Financial offers a loan calculator on our website, which can help borrowers estimate their payments and see how they fit into their budget. This tool, along with other educational resources like ebooks, videos, and blog articles, can provide valuable insights and guidance.

Initial Conversations with a Loan Officer

The panelists discussed what borrowers can expect during their initial conversation with a loan officer. Debbie explained that these conversations focus on understanding the borrower’s background, goals, and the scope of their operation. Tyler emphasized the importance of explaining FCS Financial’s cooperative structure and how it differs from traditional banks. This understanding helps borrowers see the benefits of working with a cooperative lender.

Detailed and Accurate Information

Brett stressed the importance of providing detailed and accurate information during the loan process. This includes a balance sheet showing assets and liabilities , tax returns, cash flow projections, and other relevant documents. Accurate information allows the credit team to evaluate the borrower’s financial position and make informed decisions. Timely and detailed submissions can also speed up the approval process.

The Loan Process

Debbie outlined the steps involved in the loan process, from the initial conversation to gathering necessary documents and submitting a loan request. Once the credit team reviews the information, they evaluate the borrower’s equity position and repayment ability. If additional information is needed, the loan officer will reach out to the borrower. The goal is to provide a quick and accurate decision, whether it’s an approval or a counteroffer.

Final Steps and Closing

Tyler explained the final steps after a loan is approved. This includes verifying conditions, obtaining appraisals, and working with title companies. Once all requirements are met, the loan officer prepares the documents for closing. The borrower can then sign the documents at the office or a title company, finalizing the loan process.

Working with FSA and Young Farmers

The panel also addressed questions from attendees. Debbie discussed FCS Financial’s collaboration with the Farm Service Agency (FSA) on loans for young and beginning farmers. As a preferred lender, FCS Financial works closely with FSA to help young farmers get started. This partnership is crucial for supporting the next generation of agriculturalists.

Planning for Future Purchases

For those planning to buy a farm in the future, Brett advised starting early and making a plan. Understanding the cost, saving for a down payment, and managing debt are essential steps. Tyler encouraged potential borrowers to establish a relationship with their local office early on. This allows for better planning and preparation, ensuring a smoother process when the time comes to make a purchase.

Final Thoughts

The webinar concluded with final thoughts from the panelists. Tyler emphasized the importance of asking questions and seeking clarification. Brett highlighted the value of detailed financials and a solid business plan. Debbie recommended maintaining an annual balance sheet to track financial health and growth trends.

Borrowing money is a significant step, but the right preparation and guidance can lead to successful growth and expansion. FCS Financial’s experienced loan officers are ready to assist borrowers every step of the way, ensuring they have the information and support needed to make informed decisions.

As a cooperative, FCS Financial is dedicated to serving Missouri’s farmers and ranchers. Follow us on social media or?sign up for email alerts ?to find out about upcoming education events.

FCS Financial provides services to 102 counties in Missouri through a network of 21 offices and is a member of the Farm Credit System. The system is a nationwide network of cooperative lending institutions that provides credit and financial services to farmers, ranchers, rural residents, and agribusinesses. With more than 108?years of agricultural lending experience, the Farm Credit System is the largest single provider of agricultural credit in the United States.