Dedicated to understanding the needs of their clients, , a Central Florida-based ag lender, recently published a white paper featuring results from a 2015 survey the company conducted among U.S. growers on the topic of succession. “Business owners understandably worry about many things when thinking about selling their businesses, but one concern clearly weighs on them most heavily – setting the next generation up for success,” said Phoebe Moll, VP and director of marketing at AgAmerica.
Of the 530 fruit, vegetable, citrus & cotton growers who completed the survey, 74.9 percent said their operation is a family business. What AgAmerica discovered was that 40 percent of the growers definitely expected to transition business ownership to the next generation, which also means setting the next generation up for success financially, as well as the lands ability to produce.
“AgAmerica is especially committed to working with family operations to help them navigate the challenges associated with passing the farm down from one generation to the next. We structure our land loan packages to allow the next generation to get a head start,” said Moll.
Farm families can customize various land loans in order to suit their needs and plan for succession. “Our longer term [20, 25, and 30-year products] are great choices for families planning ahead for future growth,” said Bryce Philpot, SVP of operations. Additionally, the company’s product allows families to ensure a decade of financial flexibility, with the option to apply for a 5-year extension. The product offers unlimited cash draw, no mandatory pay-down or “rest periods,” and no prepayment penalties, among other features.
According to the USDA, 97 percent of the 2.1 million farms in the United States in 2012 were family-owned operations. Like most family-owned and operated businesses, one challenge often faced is the issue of succession.