1. Straight From the Lender’s Mouth
http://www.ballpublishing.com/GrowerTalks/ViewArticle.aspx?articleID=19258&highlight=barry+sturdivant[2/3/2015 11:11:03 AM]
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Home | GrowerTalks | Green Profit | Ball Publishing | Ball Bookshelf
Tuesday, February 03, 2015 Vol. 78 No. 10
Also in this issue...
01 | Digital Edition
02 | GT in Brief
03 | SAF in the Lobby
04 | New Products
05 | New Products Submissions
06 | Classifieds
07 | Request Product Info
08 | Young Grower Award
09 | Article Archive
10 | Acres Online
11 | GreenTalks
12 | Inside Grower
13 | Landscape Insider
14 | Perennial Pulse
15 | Trade Show Calendar
16 | Subscriptions
17 | Hard Goods Distributors
18 | Media Kit 2015
Featured Companies
BEAVER PLASTICS
GREEN FUSE BOTANICALS
GRIMES HORTICULTURE
FOUR STAR GREENHOUSE
DEWITT COMPANY
RISE
NATURE'S SOURCE
HORTAMERICAS
ERNST BENARY OF AMERICA
DANZIGER DAN" FLOWER FARM"
>> See All Features
Features
Straight From the Lender’s Mouth
| Jennifer Zurko
>> Published Date: 5/21/2012
Unless you have thousands of dollars stashed under your mattress, you’ll need a loan to finance that
new addition or to make improvements to your existing facility. We asked Barry Sturdivant, senior VP of
the Nursery/Greenhouse Agribusiness Center for Bank of the West, to provide a few tips to help you
work with your lender to come up with the best financial plan.
If a grower wants to build or renovate his/her greenhouse, what’s the first thing he/she needs to
do?
We always want to support the growth of our customers and prospects. We also know that one thing that
can get a growing operation in trouble is adding production capacity on a speculative basis. Therefore,
the first thing we want to know when expanding an operation is whether the grower has a home for the
additional plant material. Are they adding new customers, new stores or added shelf space?
The second thing we need to see is a brief feasibility showing the expected increase in sales and/
or the improved efficiency from the added production space or added equipment or renovations.
What do lenders look for when helping a grower get a loan?
We look for assurance that the grower has considered the costs and benefits from the new greenhouse
and that the new structure will pay for itself in a reasonable period of time.
How difficult is it to get financing? Has the economic climate made it harder for business owners
to borrow from their banks?
Our bank looks to the greenhouse industry as an area of growth for at least the next five years. It has
consistently performed well in the past three years, even during this challenging economy. One main
concern is the impact of adverse weather during the spring shipping season. However, being a large
agricultural lender we understand the weather’s impact and work around it. The economic climate has
brought added regulation and compliance issues to banking, but the primary impact has been to slow the
loan-closing process. As of March 31, 2012, our loan volume has grown nearly 10% over the prior year.
Does the size of the grower’s business matter?
Since our office exists to serve a specific industry niche, we try not to discriminate based on size. We
have a unit in the bank that exists to help us streamline the process for smaller growers. Our portfolio
includes the country’s largest operations, as well as growers who aren’t even known beyond their home
county.
What are some other suggestions that Bank of the West offers to its grower clients? For example,
what are some things growers should NOT do when trying to get a loan?
Mainly what we suggest is that they keep a close eye on their cash and working capital. It’s much easier
for Bank of the West Relationship Managers to support a customer’s growth if they have adequate cash
to take advantage of opportunities or to withstand minor business interruptions. They also should be able
to articulate a business plan and provide reliable financial information.
Is it a good time to borrow for expansion?
Banks continue to look favorably upon their greenhouse grower customers and want to help them grow,
but borrowing capacity for expansion will vary between each operation. Two factors will greatly impact
the credit decision: cash flow and liquidity. Adequate cash flow, both historic and projected, is needed to
service debt needed to fund the expansion. Adequate working capital (current assets minus current
liabilities) is needed to ensure a reasonable collateral margin for the line of credit (which will probably
need to be increased to support the higher sales level) and to meet expenses during the busy shipping
season. So far, 2012 seems to be rebounding nicely from a generally down year in 2011. Good mid-year
performance will go a long way toward making this a good time to borrow for expansion. GT
Search GrowerTalks
![Straight From the Lender’s Mouth
http://www.ballpublishing.com/GrowerTalks/ViewArticle.aspx?articleID=19258&highlight=barry+sturdivant[2/3/2015 11:11:03 AM]
>> See All
Home | GrowerTalks | Green Profit | Ball Publishing | Ball Bookshelf
Tuesday, February 03, 2015 Vol. 78 No. 10
Also in this issue...
01 | Digital Edition
02 | GT in Brief
03 | SAF in the Lobby
04 | New Products
05 | New Products Submissions
06 | Classifieds
07 | Request Product Info
08 | Young Grower Award
09 | Article Archive
10 | Acres Online
11 | GreenTalks
12 | Inside Grower
13 | Landscape Insider
14 | Perennial Pulse
15 | Trade Show Calendar
16 | Subscriptions
17 | Hard Goods Distributors
18 | Media Kit 2015
Featured Companies
BEAVER PLASTICS
GREEN FUSE BOTANICALS
GRIMES HORTICULTURE
FOUR STAR GREENHOUSE
DEWITT COMPANY
RISE
NATURE'S SOURCE
HORTAMERICAS
ERNST BENARY OF AMERICA
DANZIGER DAN" FLOWER FARM"
>> See All Features
Features
Straight From the Lender’s Mouth
| Jennifer Zurko
>> Published Date: 5/21/2012
Unless you have thousands of dollars stashed under your mattress, you’ll need a loan to finance that
new addition or to make improvements to your existing facility. We asked Barry Sturdivant, senior VP of
the Nursery/Greenhouse Agribusiness Center for Bank of the West, to provide a few tips to help you
work with your lender to come up with the best financial plan.
If a grower wants to build or renovate his/her greenhouse, what’s the first thing he/she needs to
do?
We always want to support the growth of our customers and prospects. We also know that one thing that
can get a growing operation in trouble is adding production capacity on a speculative basis. Therefore,
the first thing we want to know when expanding an operation is whether the grower has a home for the
additional plant material. Are they adding new customers, new stores or added shelf space?
The second thing we need to see is a brief feasibility showing the expected increase in sales and/
or the improved efficiency from the added production space or added equipment or renovations.
What do lenders look for when helping a grower get a loan?
We look for assurance that the grower has considered the costs and benefits from the new greenhouse
and that the new structure will pay for itself in a reasonable period of time.
How difficult is it to get financing? Has the economic climate made it harder for business owners
to borrow from their banks?
Our bank looks to the greenhouse industry as an area of growth for at least the next five years. It has
consistently performed well in the past three years, even during this challenging economy. One main
concern is the impact of adverse weather during the spring shipping season. However, being a large
agricultural lender we understand the weather’s impact and work around it. The economic climate has
brought added regulation and compliance issues to banking, but the primary impact has been to slow the
loan-closing process. As of March 31, 2012, our loan volume has grown nearly 10% over the prior year.
Does the size of the grower’s business matter?
Since our office exists to serve a specific industry niche, we try not to discriminate based on size. We
have a unit in the bank that exists to help us streamline the process for smaller growers. Our portfolio
includes the country’s largest operations, as well as growers who aren’t even known beyond their home
county.
What are some other suggestions that Bank of the West offers to its grower clients? For example,
what are some things growers should NOT do when trying to get a loan?
Mainly what we suggest is that they keep a close eye on their cash and working capital. It’s much easier
for Bank of the West Relationship Managers to support a customer’s growth if they have adequate cash
to take advantage of opportunities or to withstand minor business interruptions. They also should be able
to articulate a business plan and provide reliable financial information.
Is it a good time to borrow for expansion?
Banks continue to look favorably upon their greenhouse grower customers and want to help them grow,
but borrowing capacity for expansion will vary between each operation. Two factors will greatly impact
the credit decision: cash flow and liquidity. Adequate cash flow, both historic and projected, is needed to
service debt needed to fund the expansion. Adequate working capital (current assets minus current
liabilities) is needed to ensure a reasonable collateral margin for the line of credit (which will probably
need to be increased to support the higher sales level) and to meet expenses during the busy shipping
season. So far, 2012 seems to be rebounding nicely from a generally down year in 2011. Good mid-year
performance will go a long way toward making this a good time to borrow for expansion. GT
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http://www.ballpublishing.com/GrowerTalks/ViewArticle.aspx?articleID=19258&highlight=barry+sturdivant[2/3/2015 11:11:03 AM]
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