Many farms are finding it difficult to make ends meet. Not only is the recession potentially coming, but there are many economic uncertainties regarding foreign trade. Some farmers, like those who grow soybeans, have been left adrift by these changes. That doesn’t mean that farms aren’t going to survive, but it does mean they need some help—and help comes in the form of working capital.
Farming can be an extraordinarily unpredictable industry. A small change in the weather could lead to devastating results. Farmers learn to deal with this type of uncertainty. Many farmers are also dealing with sociopolitical and economic unpredictability. As these issues compound, it becomes difficult to ensure stability.
Without working capital, farms cannot reinvest in their crops. Farmers are then not able to pay out their employees, nor will they invest in new and reliable equipment. Farms are an industry in which having money leads to making money, and not having money makes it impossible to continue generating revenue.
A working capital loan makes it possible for a farm to remain open during lean times and eventually recover. Even though having strong working capital is essential to farm business, many of them struggle to maintain this buffer. Even when working capital is achieved, it can be wiped out by issues as they arise. A working capital loan can help.
Often, to rebuild your working capital, you need an influx of cash first. Without an influx of cash, it can be difficult to make a profit again. Farms can leverage working capital to improve revenue by investing in new land and equipment, or optimizing operations using superior technology, processes, or trained labor.
Lending and loans are incredibly important to maintaining working capital, as they provide you with the flexibility you need during difficult times. The more capital available to you, even in terms of a loan, the more options are open to you. Ultimately, working capital loans make it possible for a farm to weather hard times until better ones come.
Once you’re able to survive difficult times, you can then improve your revenue generation and profit-building potential. From there, you will build up a working capital buffer on your own.
Working capital is currently at a 10 year low in the farming industry. If your farm needs working capital, the time to look is now. In the next few years, it’s likely that lenders will tighten their restrictions, and the federal interest rates may also rise. MY Company Funding can connect you to extremely competitive working capital loans. Contact MY Company Funding today to find out more.