Jim Drege & Associates, Inc. was created in December, 1992. The Company was started with the idea of providing Farmer Mac secondary market real estate financing for farmers in the Upper Midwest. We have completed over $100 million in loans to farmers since our inception in 1992.
It is our belief that the only thing more important than interest rates on a farmer’s balance sheet, is debt structure. Your debt can be all 5% money, but if your debt is poorly structured, you can still have cash flow issues. Our experience tells us that poorly structured financial statements in the ag sector are closer to the norm than an aberration. Our goal always, when analyzing farm credit, is to put the best possible structure together, given the level of pledgeable assets, and the level of liabilities. The time to make sure that your balance sheet is structured properly is when you can, not after the most recent disaster when lenders are taking a harder look at new credit requests.
We are extremely concerned that the perfect storm may be brewing regarding interest rates. Given the present state of the economy, and huge spending increases occurring in our nation’s capital, it is likely that inflation, and higher interest rates are on the horizon. If you haven’t minimized the interest rate risk to your balance sheet by locking in 10 year fixed rates, you should do so now. A 4, or 5% increase in interest rates can have a devastating effect on your financial well being, if you have any serious leverage on your balance sheet. Agriculture has escaped to date, most of the carnage that has affected residential mortgages and other sectors of our economy. It is possible that we may escape some of that hardship, but the time to prepare is now.
We are here to work for you to meet the interest rates you need to fulfill your loan.
Longer Term Fixed Rates Are Still Historically LOW! And Mortgage Rates have recently fallen again.