Farmers are already looking ahead to the next growing season, and that means it is time to start preparing for an operating line of credit for 2026. Lenders want to see more than a basic snapshot of your plans. They want a clear picture of how you intend to manage the year ahead and the financial outlook you are building.
When you sit down with your lender, they will expect a full cash flow projection for next season. Austin Peiffer, associate attorney with Ag and Business Legal Strategies in Cedar Rapids, says lenders want to know what you plan to plant, what it will cost to put that crop in, and what you expect to earn when it comes out.
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After you walk through your cash flow plan, your banker will also want to review your balance sheet. Peiffer says that the sheet needs to be updated and accurate because it shows whether you have the short-term assets needed to meet your short-term obligations. It also tells lenders whether you are considered solvent based on the ranges and ratios they use to measure loan strength.
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These steps help lenders understand your plan for the coming year and the financial position you expect to be in as the season unfolds. Peiffer says it is important to approach these conversations early and to make sure your information is complete and correct. As you work through those details, he says the best thing you can do is keep communication open with your lender. Staying in contact through the winter allows both sides to adjust as markets shift and input costs change. It also shows that you are committed to managing risk and keeping your operation on a strong footing heading into spring. That steady communication can make the entire planning process smoother for everyone involved.
