Don’t Get Left Hanging: Why You Need a Backup Plan for Your Farm Loan

Many people think banks and credit unions are very different from other businesses they deal with, but that’s not true. Banks offer 'products’ to their clients, which are the different loan products they have, and they ‘sell’ those products to farmers. The price of the products is the interest and fees a client pays to use them. Once farmers realize that banks are just like other businesses, it becomes clear that the people you talk to at the bank when applying for a loan are actually salespeople, just like the ones at an equipment dealer or any other supplier you deal with. Like in any business, you can meet both great and not-so-great sales staff.  

Bank salespeople—also known as account managers or account representatives—are paid to increase the bank’s business. While they don’t get a direct commission like other sales roles, their job is to bring in business and make sure they don’t lose good loan opportunities to other banks. This can lead to situations where bank staff are motivated to be overly optimistic about getting a loan approved and they frequently do not clearly communicate the risks. When things don’t go as intended, farmers can end up getting declined for a loan they need, and have no time to fix the problem.

It is important to know that the account manager you work with, isn’t the one who actually decides whether your loan gets approved. They rely on their experience and the bank’s guidelines to guess at what will and won’t be approved. Since most banks offer similar loan products, there is often incentive to make the loan seem likely to be approved to keep you from looking at other lenders. At Glengarry, we’ve frequently seen clients led on for months, and farmers often end up in tough spots. It is really important to have a ‘plan B’ ready to go when you find out your account manager has overpromised due to optimism, but the credit manager sitting in a Toronto office tower doesn’t agree with their vision for your operation.   

The good news is that Glengarry is great ‘plan B’ and has one of the fastest approval timelines in the industry, with funding available in as little as 4-5 weeks. If your bank leaves you in a tough position, it a short-term bridge loan might be the best option to help you through it. Contact us at JGinquiry@glengarry.ca for more information.