Farm Credit Services Southwest: Notebook: Financial Tips

Your Equity Line of Credit

Easy access to cash, flexible repayment and just what you need for land purchase, business start-up or seasonal cash-flow requirements

What if you could access a convenient line of credit anytime you wish for any business-related transaction and then make interest-only payments on the amount that you borrow? Farm Credit Services Southwest makes it all happen for you and your business with an equity line of credit.

Meets your needs for flexibility

The equity line of credit is one of the most flexible options offered by FCSSW, providing you with:

A draw period for up to five years
- No annual renewal as with regular operating lines of credit
- Interest payments only on the amount that you draw (Example: If you have a $50,000 line of credit but need to borrow only $15,000, then you pay interest on $15,000)
- No prepayment penalties
- repay the balance anytime you wish during the draw period
- Draw on your line of credit up to three times in any month
At the end of the five-year draw period, any outstanding loan balance becomes a real estate loan amortized over 20 years with regular annual payments.

Three options for accessing your funds

Yuma Fruit Grower Enjoys Savings and Fast Service

“I like the equity line of credit because it saves us on interest charges. Instead of paying interest on the full amount of an operating loan year-round, we pay the revolving loan down and then only owe on the amount of the advance. It cuts our interest almost in half.

“Access to our money is fast and easy. We simply call Farm Credit and provide instruction, and then either pick up the check at the office or they deposit it for us. We always get excellent service.”

Linda Manfredi General Manager Yuma Mesa Fruit Growers Yuma, Ariz.

FCSSW also offers three convenient options for accessing funds in your line of credit. Depending on your preference, FCSSW can either wire the funds directly into your checking account or simply deposit the requested amount directly into your checking account. Or, if you prefer, you can pick up your check at your FCSSW branch office.

A variety of potential uses

You can use your line of credit to help meet virtually any business need. For example:

Buy land. Land values are increasing so rapidly that its worth often outstrips interest payments. Having a line of credit on hand helps make it easier for you to strike while the iron is hot.
Start a new enterprise. Sometimes, a new enterprise requires financing until land provides cash flow. For example, it can take a citrus crop three years after planting to generate revenue. Meanwhile, the business owner can access a line of credit to pay for planting, fertilizer and irrigation.
Offset seasonal cash flow deficits. Some businesses generate cash only during certain times of the year. The remaining months are often devoted to production tasks which may require periodic infusions of cash to support operations. A revolving line of credit is the perfect solution.

Call for information—or apply today

Applying for your FCSSW equity line of credit is fast and easy. For information — or to apply — call your loan officer today!