A unique approach to crop financing

One ag lender is focused on the crop with a different type of lending.

The structure of a loan through FarmOp Capital is unique to agriculture, looking at the farmer's ability to produce the crop with risk mitigations such as examining market strategy and crop insurance.

"While we have experts that understand crop insurance, marketing and production agriculture, we are an independent lender," explains FarmOp CEO Bill York. "We don't provide any of those services."

FarmOp looks at production history, farm production techniques and what the expected value of a crop is. This is used as collateral for the loan.

"We are structuring a loan around their needs, giving them the independence to make decisions," added York.

York said the company will lend more than anybody else on the crop and will make decisions earlier. Farmers have the flexibility and capital to lock-in inputs, get cash discounts and negotiate more effectively for rent.

"The loan is structured so it expands as they do. If the farmer is able to add a few additional acres, we'll adjust the loan to fit that," said York.

Should the value of a crop go up, FarmOp will lend on that as well. York feels this different method of lending has gone very well utilizing the new and efficient risk management strategy.