Why Does This Have to be so Painful?

I understand that many agri-businesses are facing challenges right now. I’ve come to accept that as an ongoing event, just in various sectors as the years go by. How would you like to be the recipient of the following notification? It was the first item I saw with this new Client.

“You requested a forbearance from collection, rather than a restructuring of the loans. A series of meetings were held with you to negotiate the terms of a request for a forbearance from collection from the Bank. Based upon negotiations, which culminated with a meeting on December 20^th, your forbearance plan was clarified and is now subject to approval. This letter outlines the terms under which the forbearance is approved.”

And, believe me, the terms were onerous. I believe I’d rather have a root canal… So, my first task was to write a three-page email explaining why the bank’s plan was unacceptable for us. Why would we want to sell the very assets that produced the cash flow needed to repay the debt? Nobody was denying that the Client owed the money to the lender. They just needed a plan that didn’t handicap the business operations or result in “brain damage!”

We were not going to sell the very items that would repay the debt. We just needed some time to get things moving in a new, positive direction.

So, what did we do?

No, we did not agree to sell their dairy herd. The mature herd is what allowed us to stay current and repay older accounts payable.
The market for heifers was quite weak at the time, so we kept them to maintain the herd.
No, we would not agree to sell all their real estate, which has since increased in value by 25%. However, there were several non-essential, small acreage parcels that were very desirable for other buyers who wanted them for home sites. We were also able to lease back two of the parcels to maintain our feed production and provide the new owners with some additional income.
We asked for an extension of the current loans. We did not ask for extra money. We just simply needed some time to “plan our work & work our plan…”

Did it work? Oh, yes, in nine months. The very people whose plan I called “Dead On Arrival” thanked me for implementing the plan that I’d proposed. It was one of the fastest turnaround situations I’ve ever worked on.

Why? Cooperation, Focus & Relentless Effort!

“There ought to be ways of reforming a business, other than by merely putting more money into it.” Winston Churchill

Let’s take your business to the Next Level!