Poor living in times of wealth

He has been looking for better financing for years. It's complicated and they are quite difficult. At the table is a farmer in the second half forty. He has a mixed farm with arable farming and dairy cattle. Questions such as: "What does better and broader financing look like? How do you achieve that?"

Then the answers come with something like: "Uh, that's different for everyone and every company of course". And: “it used to be much simpler”. An appropriate interpretation is the need, but what this is remains a bit vague at the same time. After some questioning, I notice that he finds it difficult. The invitation was actually provided by him.

Somewhat irritated, he says: “those are typical of those consultant questions”. After some reflection time follows: “I am bursting with power. There was plenty of land and buildings and I want entrepreneurial space to do things myself. But it just doesn't work to get my way completely, or if that makes you happy."

Set up financing
It is an interesting and very important topic. Correctly organizing the financing that suits the entrepreneur and his company is actually a basic part of business management. It has to be in order, period.

The questions and answers therefore continue:
“How much financing do you have?” Almost two million.
“Everything from the bank or elsewhere?” At the bank, that big well-known within the sector you know.
“Do you use lease?” Yes, but reluctantly.
“Do you have family loans?” With my brother and that's fine. He is not always whining”
“What interest type do you have and what are you paying now?” First everything variable, that is cheapest. Recently fixed half for 10 years, otherwise I took too many risks.
“Is the repayment appropriate?” No, they keep talking about being 65 years old and I should be debt free. Why, the land is only getting more expensive! And besides, the money costs next to nothing. Renting is more expensive!

Luxury and opulence
"So if I understand correctly, in your case a better financing is that you have variable interest and do not pay off too much." He nods and asks if I've ever heard of "living poor and dying rich". And that in this time of luxury and opulence. "What does it take to set it up in such a way that it suits you best? I ask the next question.

We talk about the will to redeem. Because yes, that much guilt is not everything. At the same time, he wants to further develop the company. There was plenty of planning and (foreign) capital is needed for that. Good material, it simply has to be there to get the job done well and smoothly. “The basics in order.” He recently leased a milking robot. "What a blessing that is," he says. "Less work and more time for other things and myself."

Prescribe financing
In fact, the structure of the financing has grown, but it hangs together like loose sand. “Which financing suits your company”, I read recently. Too many farmers let them prescribe how that financing should be organised. It is better to tackle it yourself and come up with solutions, that is part of entrepreneurship.

You don't have to be an economist to understand that you decide whether you want to live poor in times of wealth. That is determined by the enterprising farmer himself.

Peter Pals

Peter Pals is an entrepreneur at Farmers Funding & Advies and grew up on a farm. From his farming heart, he has decided to build up a business for business, financial and tax advice for agricultural entrepreneurs.

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