I recently tried to borrow from two banks using my farm as collateral. Big surprise! My six-figure investment in the improvements I made to the property are worth...nothing. They say the deer farm (excluding the land it sits on) is worthless without me to run it, and it might even make the land worth less because the property would have to be cleared before it would bring fair market value. And even then, they'd only offer $1500/acre when my neighbor up the road has the same size property with zero improvements listed for $5800/acre. Does any of this make sense? The banks are blaming their regulators for their new rules. Just venting here...
Ever borrow against your deer pens?
- Thread starter ANTLER VALLEY
- Start date
Yeh I believe you! I got a loan last year to buy a clover field adjoining my property and it took months to finally get approved, they gave me no extra appraisal value for my expensive deer pens. borrowing should be getting easier but what I see its getting harder!
Joined May 2009
1,166 Posts | 0+
Tuscaloosa, Alabama
You can thank Obama for your problems. He has put strict regulations on banks. The banks premiums on FDIC insurance is based on their loans and it is through the roof. Banks make more money by not lending and their premiums will be cheaper. So basically if it's not a" no brainer". The banks won't touch it.
Joined Apr 2009
702 Posts | 0+
Marquez, TX
Richard, your statements are very accurate. Government regulators are traveling the country slapping the banks wrists telling them to quit loaning money to people who need money. 50-55% loan to value is the best you're gonna do right now and even then banks want to see enough clear income to cover the loan amount in the event the business you are borrowing for did not produce any revenue. It's very difficult to borrow any money right now. Don't expect this to change in the near future.
We did a open line of credit last year against are equipment and our deer. The land wasn't part of it. But they would only loan up to 30% of the total value and we had to have everything insured of course. They let me count the resale value of all our fencing and poles as well. The hardest part was finding some where to insure all our deer. I was getting very madd at the world by the time it was said and done. You think that you're doing the responsible thing by paying cash for everything up front so you have the equity when the time comes to borrow money to take the next step. But then no one wants to loan it to you. But it all worked out in the end, and I really like having the insurance on our deer. Hoplefully if we ever need to make a claim i'm still happy with the insurance. That always sits in the back of my mind.
