Traditionally Farmers have to go through a serious of banking procedures to qualify for a loan and just that process can be a very expensive undertaking and investment for the already distressed agricultural business. The procedures common and absolutely necessary and does not always guarantee a loan will proceed with a bonafide commitment from the bank or lender. These procedures are feasibility studies, environmental studies, certified business valuations, real estate appraisals, and even equipment appraisals. The process is time consuming which may endure many months and cost can range from $30,000-$250,000.00 for a ” possible investment loan from the bank or lender with fees that are non refundable.
As you may observe the feasibility study is comprised of environmental engineering reports and is usually conducted after producers have discussed a series of business ideas or scenarios. The feasibility study helps to “frame” and “flesh-out” specific business scenarios so they can be studied in-depth. During this process the number of business alternatives under consideration is usually quickly reduced.
During the feasibility process you may investigate a variety of ways of organizing the business and positioning your product in the marketplace. It is like an exploratory journey and you may take several paths before you reach your destination. Just because the initial analysis is negative does not mean that the proposal does not have merit.Sometimes limitations or flaws in the proposal can be corrected.
The Business Valuation will take into account the agricultural business valuation by identifying precisely the business economic value in terms of income approach, asset approach, and market approach. A separate valuation will have to be performed with the real estate and finally another valuation will comprise of the equipment itself.
The Agrilend.co membership model works much more effective by pooling international private public initiative money into the agriculture sector and guaranteeing funding through its conduit MERCOSUR. Membership fees are much less than the traditional banking lending model and is guaranteed. Before paying any membership dues, however Agrilend.co does have a formal procedure to consider accepting an applicant before paying any membership fees, it is stipulated in the diagram below.
If you are considering financing, acquisition, equity, debt, mezzanine, private equity or capital venture through the agrilend.co model and would like advice or seek questions, please email me at email@example.com or visit our website at www.agrilend.co