Farmers and ranchers play essential roles in our global society. Unfortunately, many of them struggle with financial difficulties because of economic strife. Like any business, getting your agricultural finances under control is essential to avoid bankruptcy.
While there are many different types of bankruptcies, farming might be the most unique. However, decreasing and managing farm debt will help you prevent this situation. Learn how to reduce your burden and increase profits.
Investigate Your Finances
Many agricultural professionals fall into debt when they lose control of their financial plans. Before you can fix your problems, you first need to understand where your issues lie. Perform an in-depth investigation of your finances. Locate every receipt; pull up your loan terms; and find out where you’re spending the most each month and by how much.
Once you have your relevant data, start making cuts. Ask yourself, “Where am I wasting money, and where can’t I afford to pull back?” This financial information will help you stick to a better plan.
Refinance Agricultural Loans
Farmers rely on loans to pay for heavy equipment, location fees, animal care, and other essential expenses. However, most of these programs come with interest rates that tack on extra costs. Refinancing your loans while interest rates are low will help save some extra cash.
If you have loans from multiple lenders, consider consolidating your debt. It’s much easier to handle one big loan with a low interest rate than a ton of smaller ones. Decreasing and managing farm debt is all about working smarter, not harder.
Work With Your Neighbors
If your farming or ranching business has fallen on hard times, you’re likely not alone. The industry tends to succeed and fail as a collective unit. When this happens, it’s better to form alliances with your neighbors than view them as competition.
Share and rent equipment out to each other to ease stress while making extra cash. Build strong relationships with manufacturing partners and suppliers. Good connections may be able to get you discounts and offer rebates to reduce costs.
Whether you run a small farm or own commercial land, you have the power to control your finances. Continue to be a vital player by being strategic about your money and repayments.
