Farmhold provides support to community banks who have been the primary financial partners to local farmers and their families for generations.
As the agricultural industry continues to change and access to capital is becoming harder, farm operating loans have become a major source of financing for local farmers. Farmhold purchases farm operating loans originated by community banks, providing balance sheet liquidity and diversification so our banking partners can continue to serve their communities while maintaining their important direct relationships with farmers.
Originating banks have the opportunity to sell participations and assignments of qualifying farm operating loans, which enhances bank profitability while addressing constraints from increased regulation. We act as a support system to the banking community by purchasing qualifying farm operating loans.
Our product is designed so that originating banks, who possess a wealth of experience working with and advising the farming community, can continue to serve and manage their relationship with local farmers.
Address balance sheet and liquidity challenges while amplifying long-standing, community relationships.
Selling participations and assignments provides an alternative funding source when liquidity is tight.
Portfolio and Risk Diversification
Frees up capital to be redeployed and invested into other assets and industries.
Diversifies industry exposure leading to reduction in capital requirements.
Mitigates single borrower legal lending limits allowing for expanded customer relationships.
Increase net interest margins to expand income, return on capital, and overall bank value.
Banks receive a servicing fee on the participation and assignments sold to Farmhold Financial, which can be treated as non-interest income. When applied to the portion of the loan retained, our banking partners will enjoy increased returns on capital.
High Return Potential
Capital released from participation can be deployed into other potentially high returning loans and investments.
Purchase Farm Operating Loans Focused on Row Crop Operations
We provide funding to row crop farm operations by purchasing farm operating loans from our community banking partners. Through participations and assignments in agricultural lines of credit, we help individual banks and the broader farm community.
Provide Funding Related to Extensions of Farm Operating Loans
We provide funding during the challenging time of the year between harvest and the delivery of the crop products.
Purchase Farm Service Agency Guaranteed Loans
We purchase participations and assignments in Farm Service Agency Guaranteed Loans at amounts up to 100% of the guaranteed portion.