The agricultural sector has enjoyed a financial bonanza in recent years not seen since the 1970’s.  Corn and soybean prices, along with farm land have exploded in recent years along with the advent of the ethanol industry, commodity inflation as a result of money flowing out of residential and commercial real estate bubbles, and droughts.  Farm land prices rocketed to all-time highs, and farm incomes followed.  The family farm has been replaced by the ever bigger corporate farms and farmers that farm increasing acres.  This trend has also forced the equipment to be larger, and more expensive.

These trends have increased the overhead expenses of farmer.  Commodity prices have dropped significantly in the last year, but input costs have not followed as fast.

Producers also purchased new equipment, many of which are amortized over 4 or 5 years or were leased with very high residual payoffs, thus creating the need for new financing when these terms are up.  This will result in cash flow crunches and will fuel the need for alternative financing in this arena.

According to Iowa State Economist Allejendro Plastina,  farm prices will continue to level out through 2024.

Farmers have relatively no options when bank loans are not available.  Friends and family can provide short term financing but they are not a bridge solution.  There remains a huge vacuum between the traditional bank loan and foreclosure that could be filled with the right product.

Structured Asset Finance provides hard money agricultural and rescue loans directly to farmers and agribusinesses.  These loans can be used as bridge financing,  where a quick close is needed,  or a bailout.  We can also purchase distressed agricultural notes directly from banks or other lenders.