6 Steps for Easing Debt Burden
With the days of exceptional corn and soybean prices gone, many farmers are faced with too much debt as they try to navigate these tight margin times. Scott Anderson posted six steps on CashCow Farmer that one should execute in order to ease this debt burden and I’d like to recap them for you:
- Refinance Debt With the FSA at Lower Interest Rates: This should be your #1 priority so you can reduce your annual cash payments. The FSA has lots of programs that may benefit you.
- Extend the Terms of the Loan Out as Long as Possible to Help Cash Flow: 20-year loans will cost you more in interest, but if you need to extend your loan to get through challenging times, do it.
- Sell Any Absolutely Unnecessary Assets: Augers, old trucks, scrap metal – turn it into cash; Eliminate everything you do not use that’s just sitting around; Maybe even spend the winter doing some low cost service work and paint so you can sell items for higher dollars.
- Rent Out Shop Space When It’s Not at Full Capacity: Did you hold back on equipment purchases but built a brand new spacious shop? Those guys who bought equipment may very well need a place to store it.
- Rent Out Any Unused Machinery to Help Make the Payments: There are companies through which you can do this, or you can do it on your own. Yes, you’ll have some additional maintenance, but you’ll also add to your cash.
- Offer Custom Services, If Possible, to Help Pay for the Machinery: Most farm work is time-sensitive and so there are folks out there who are willing to pay to get the job done. Whether its planting, spraying or combining, offer a better price than your competition. Also, get creative with your service offerings: clean driveways and hay ditches, for example.
Log on to http://blog.cashcowfarmer.com/posts/overwhelmed-with-debt-6-must-do-steps-to-ease-the-burden for more information, as well as an informative podcast. You can feel choked by your farm debt, but there are ways to work through that to keep your operation afloat.
-Terry Olson, Titan Outlet Store Team