Bridge Loan Product Offered by FBN Finance to Aid in Closing on Land Purchases in a Small Time Window

Listen to KC Sheperd talk with TJ Wilson about FBN Finance’s bridge loan product.

Farm Director, KC Sheperd, is visiting with the director of sales for the Farmers Business Network finance team, TJ Wilson, about the bridge loan product offered by FBN Finance.

FBN Finance is a membership-based network that is free to join,” Wilson said. “It is kind of a conglomerate of a bunch of farmers across the country, mainly in the United States and Canada. It is really a one-stop-shop when it comes to everything agriculture.”

Recently, Wilson said FBN Finance has launched the bridge loan product, offering farmers with a powerful tool for land purchases.

“We just launched the bridge loan product here for FBN, which is a new product for us and for our customers,” Wilson said. “What we really saw in the industry with this is the appraisal time frame for ag real estate loans is a lengthy process and we needed to find a way to bridge that gap and allow these customers to get their capital sooner.”

Closing a traditional land loan can be a lengthy process: typically taking up to 60 to 90 days to close, often due to the time it takes to complete an appraisal. A bridge loan is an expedited land loan that allows borrowers to secure financing and close on land purchases often on a much shorter timeline than more traditional land loans. The bridge loan acts as a “pre-approval” and enables the buyer to move forward in a manner similar to a cash buyer.

Using FBN technology, Wilson said, the FBN finance team is able to potentially close on deals in as little as three weeks, which allows farmers and producers to act as cash buyers.

Any person who is needing to borrow money and needing to close out in a tight time frame, Wilson said, would be a good fit for the bridge loan product.

“We run into a lot of competitive situations where if you are aggressively buying land and you are in a very competitive situation in your market, you have got to be able to act quickly,” Wilson said. “If you are in a market that requires a longer-term appraisal process, this is definitely something you want to be looking at.”

For 2023, Wilson recommends that farmers watch for what interest rates are doing for the rest of the year and keep an eye on their break-evens.

“If there is a major drop in commodity prices, that will have a direct impact on what their profitability and what their break-even will look like,” Wilson said. “That could greatly impact the working capital they have built up over the last two years and figuring what they are going to do for capital expenditures as well. I don’t anticipate there is going to be much borrowing going on with new equipment purchases and things like that based on the polls we have run across FBN, but that could always change.”

With input prices continuing to stay high, Wilson says there will be an increased need for borrowing on the short-term side.

The FBN finance team works with customers in all 50 states, Wilson said, and does most of their communication remotely. 

FBN.com is kind of our general page where you can come in and learn anything you want to and navigate through FBN as a whole and then we have a financing page on FBN.com that you can learn about all of our product sets and see who are team is and where they are at in the country,” Wilson said. “You can reach out, you can start applications and complete applications there, or just request somebody to contact you and learn about what we do.”

Verified by MonsterInsights