SAN CARLOS, Calif. & CHICAGO–(BUSINESS WIRE)–Farmers Business Network, Inc. (FBN®), the leading direct-to-farm ag tech platform and farmer network, today announced the launch of Farmland Capital, a unique farmer-friendly financing co-investment option from FBN Finance. The product allows farmers to tap into their farms’ equity to access the funds they need.
There is tremendous demand from farmers who want access to capital without the burden of debt. According to an FBN survey of its members, more than 69% of growers want to reinvest in their farming business, but don’t want to take out additional bank loans. 39% of respondents are considering buying out a family member, with 19% saying this will happen in the next 5 years. Another 37% of farmers want to buy new farmland in the next year, while 30% are looking to transition their land to take advantage of carbon payment programs, with another 13% looking to transition to regenerative ag, and 9% want to transition to an organic operation.
FBN Finance invests in a slice of the farm’s equity as a passive minority partner, paying farmers cash today for a share of the farm’s future appreciation. There is no interest or rent payments to FBN Finance, giving farmers a path to full ownership of the land without the burden of debt.
Farmers can use Farmland Capital to:
- Lower debt payments: The cash injection enables growers to improve the financial metrics needed to qualify for a lower interest rate.
- Expand their operation: Growers looking to invest in their existing operation or buy new land can use the funds toward a larger down payment.
- Keep the farm in the family: In the event of a family succession, co-owners who want to continue operating the farm can use the funds to buy out other co-owners who don’t.
- Cash out: Growers near retirement can take cash out from their farm’s equity without selling land or paying interest.
- Transition to Organic or Regenerative Practices: Growers can use the cash to weather agronomic and market risk while they transition to more sustainable practices.
“There is very limited access to capital in the market for farmers, which results in farmers having to make tough, no-win decisions for their farm,” said Dan English, General Manager of FBN Finance. “Farmland Capital from FBN Finance provides critical access to funding, leading to farmers having unprecedented flexibility and numerous lucrative options in managing their operation. We’re excited to invest in the most innovative farmers on earth: FBN members.”
Through the Farmland Capital product, FBN Finance participates in farm appreciation and depreciation alongside the farmer. Contracts are 10 years, but the farmer can buy out the co-investment portion or sell the farm at any time. Farmland value is determined by appraised value or sale price.
Eligible farms include row crop farms, permanent crop farms, and improved pasture land. The grower makes all management decisions, pays farm costs, and receives 100% of income from farm operations.
Farmers Business Network, Inc. is an independent ag tech platform and farmer-to-farmer network with a mission to power the prosperity of family farmers around the world, while working towards a sustainable future. Its Farmers First® promise has attracted over 27,000 members to the network with a common goal of maximizing their farm’s profit potential. FBN has set out to redefine value and convenience for farmers by helping reduce the cost of production and maximize the value of their crops.
The FBN network has grown to cover more than 70 million acres of member farms in the U.S., Canada, and Australia. Blending the best of Midwestern agricultural roots and Silicon Valley technology, the company has over 600 personnel and offices in San Carlos, Calif., Chicago, Ill., Sioux Falls, S.D., a Canadian Headquarters in High River, Alberta, and an Australian Headquarters in Perth.
To learn more, visit: www.fbn.com.