7 Small Misses That Turn into Big Problems
- Grant Wiese
- 4 days ago
- 5 min read
NW Call to Action
7 Small Misses That Turn into Big Problems
For many farm operations, the annual line of credit renewal meeting sets the tone for the entire year ahead. It influences what flexibility you will have during planting, how confidently you can market grain, and how proactive you can be with managing risk. While it may feel like a routine appointment, the renewal is really a financial checkpoint, and how prepared you are walking into that meeting matters.
Doing the work up front allows you to provide accurate, clean information to your lender. That accuracy builds trust, shortens the renewal process, and gives you confidence in your own numbers. The better your financial data, the more confidently you can make financial decisions across your operation, whether that is input purchasing, marketing grain, or investing in equipment. Preparation is not about impressing your lender, it is about knowing your own business well enough to drive it forward intentionally.
Below are 7 small misses often overlooked in the renewal appointment that you should be doing to create the most accurate financials possible, and gain the most benefit out of your meeting.
1. Have All Grain Marketing Fully Documented
Your lender needs a clear picture of what has already been marketed and what price protection is in place. Bring complete docu
This should show quantities, prices, dates, and whether positions are cash contracts, hedge to arrive, futures, or options. Many renewals get delayed or complicated because grain marketing is loosely summarized instead of properly documented. When your lender sees organized statements, it reduces uncertainty around revenue projections and working capital.
More importantly, this process forces you to truly reconcile what is sold versus what is still exposed to price risk.
2. Provide Detailed Equipment and Vehicle Transactions
Every equipment or vehicle purchase and sale should be clearly documented with transaction dates, purchase or sale prices, and full loan documents if financing was involved.
Lenders are not just looking at the dollar amount of new debt, they are evaluating how frequently assets turn over, whether values are realistic, and how payments affect annual cash flow. Missing details or vague explanations create more questions than answers.
Having this information prepared shows discipline in capital management and helps avoid surprises that could tighten borrowing capacity later in the year.
3. Clearly Outline Input Financing Contracts
Input financing has become more popular but also is often forgotten on balance sheets! Bring a detailed list of all input financing contracts currently in place, including interest rates, outstanding balances, and exact payoff dates.
This allows your lender to properly account for true short-term obligations instead of underestimating liabilities that hit later in the season. It also helps you manage the sale of your assets as input financing notes become due around harvest.
Many farms feel squeezed mid-season simply because input financing obligations were not fully considered during renewal.
4. Review Recent Checks and Pending Expenses
In the days leading up to your renewal meeting, review checks written in the past month. Confirm they have been cashed and identify any large expenses that could hit your line of credit in the next few days.
Outstanding expenses can distort your operating balance and working capital if they are not accounted for. Walking into a renewal with floating liabilities undermines the accuracy of your numbers and creates unnecessary confusion.
This step seems small, but it often prevents awkward follow up conversations after the meeting. Nothing is worse than creating your farm plan for next year feeling like you are in a strong financial position, only to discover 2 weeks later you forgot $200k in written but uncashed checks and your operation is actually illiquid.
5. Update Loan Balances and Accrued Interest
Bring updated principal balances on all loans and note when payments are made so accrued interest can be accurately entered. Even minor discrepancies compound over time and erode the reliability of your financials.
Accurate loan balances allow your lender to correctly calculate debt service requirements and evaluate risk. They also help you understand how interest expenses are truly impacting profitability.
This is about controlling the details so they do not control you later.
6. Maintain a Consistent, Timely Balance Sheet
Your balance sheet should be completed in the same 30 day window every year. Consistency matters more than perfection.
Using the same timing allows meaningful year over year comparisons and prevents false signals caused by seasonal fluctuations. A clean, consistent balance sheet shows trends in liquidity, leverage, and net worth that lenders value heavily.
It also gives you a clearer picture of whether strategic changes are actually improving your financial position.
7. Bring a Thoughtful 2026 Projection
A strong renewal meeting includes looking forward, not just backward. Have a 2026 projection prepared that clearly details what changes you plan to make to improve margins.
This should include acres of each crop, expected yields and prices, changes in input strategies, and details of rental agreements. If rents are increasing, show how you plan to offset that. If acres are shifting, explain why.
Lenders respond positively when they see intentional planning instead of hopeful assumptions.
Bonus: Show Long Term Thinking and Courtesy
A five year equipment replacement plan demonstrates that capital purchases are strategic rather than reactive. It reassures lenders that future debt is being considered intentionally.
And finally, bringing treats for the office staff never hurts. It is a small gesture that acknowledges the relationship side of banking and sets a positive tone for the meeting. While the lender typically leads your renewal appointment, there is a ton of work being done in the office by the entire staff (often unknown to you) to successfully service your account.
Final Thoughts
A line of credit renewal should not feel intimidating or rushed. When your information is accurate and organized, the conversation shifts from justification of your information to a strategy session. If you show up prepared, this becomes the best time to sit with your lender and learn what other farmers are doing well and how you can implement some of those strategies into your farm!
Preparation strengthens your lender relationship, reduces stress during the growing season, and most importantly gives you clarity and confidence in your own financial decisions. In today’s tight margin environment, that clarity is not optional. It is a survival mechanism and competitive advantage.
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Have a great week!
Grant
