This website serves Farmers and Ranchers in the Kansas AgriTourism Industry.
Welcome to Kansas AgriTourism!
This website has been developed specifically for Kansas farmers and ranchers involved in AgriTourism, rural properties where the traveler has an opportunity to experience farm and country life far from the hustle of the city.
the Kansas Agriculture Marketing Division and the Travel and Tourism Division of the Department of Commerce
and with financial assistance from Frontier Farm Credit.
We invite you to explore this website to find a variety of articles and resources that will help you succeed in agritourism.
If you have any questions, please contact the Department of Commerce, Travel and Tourism Division, and ask for the Agritourism Liaison.
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When You Must Borrow Money to Grow Your Business
As we are either starting or expanding our direct farm marketing businesses,
the inevitable dilemma occurs:
"I don't have enough capital to do it right. Should I borrow, or should I just start small?"
Note: This is the first of a series of articles about this timely dilemma, based on a series of interviews with Dennis Lawson, who works with Kansas farms and ranches for Frontier Farm Credit.
 Sometimes, you have to borrow money to grow a business. If you are considering a loan, picking the right lender is very important, according to Dennis Lawson, Financial Services Officer for Frontier Farm Credit. Different lenders have slightly different business strategies, and might decline your loan simply because your agritourism operation does not match their business strategy.
Secondly, this is going to be an ongoing relationship, so you want to be sure you are borrowing money from somebody you can trust. Your lender has to be someone you can ask the tough questions, like "Am I crazy, or will this work?"
And of course it has to be somebody with the knowledge and the integrity to give you honest answers that help you make the right decisions, and a realistic loan program. Simply put, you have to know that you both want the business to succeed.
Next, you should know what the lender needs to know about you and your business, and understand why it is important for him to have the facts, and the big picture. Lawson says that "lenders are all about numbers and facts." That's how they make an informed decision.
So you need to spell out your business plan on paper, and pull together the financial information that will help you both see if your plan can work. This plan outlines:
- Where your business is today
- How you got where you are
- Where you are going
- What your plan is to get there
On the financial side, he or she will want to review a number of reports with you. If you don't have these for your business, you may need to ask an accountant or bookkeeper to help your prepare the information. Here's what the lender will need to look at:
- Balance Sheet
- Income Statement
- Cash Flow
- Tax Returns
- Credit Report (lender will obtain this)
These reports sometimes seem intimidating, but they shouldn't be. A balance sheet (sometimes called a "financial statement") is simply a way of looking at your financial position at a specific point in time - a financial snapshot of the business. The others are similar tools that help you and your lender make a fair and reasonable decision regarding your loan.
In our future articles, we'll talk about how to identify your assets and liabilities to establish your owner equity, look at the income statement and cash flow projections, and we'll take a look at credit ratings, and how to improve your credit rating if necessary. We hope you'll be looking for these articles in the months to come.
If you have immediate questions or would like to know more about the services of Frontier Farm Credit, give Dennis a call, at 800-935-3081.
When You Must Borrow Money, Part One- Selecting A Lender Who Shares Your Interests
When You Must Borrow Money, Part Two- Understanding Assets and Liabilities
When You Must Borrow Money, Part Three- The Income Statement and Cash Flow Analysis
When You Must Borrow Money, Part Four-Credit Bureau Report & How to Improve Your Credit Rating
When You Must Borrow Money, Part Five-The Five Credit Factors
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