Any experienced farmer understands that some years are better than others. For every farming operation, there will be some seasons that are particularly productive and profitable, and others that are not. Thankfully, there are several financial strategies which can help farmers keep their businesses protected – in good times and in bad. 

In this article, we’ll introduce you to some tips – including farm refinancing – that can optimize your farm’s cash flow. 

Three Ways to Improve Your Farming Operation’s Cash Flow

The key to optimizing your farming business’ financial strategy is to maximize your liquidity. In plain English, that means you should be aiming to increase your assets that can be quickly converted into cash. In this way, you’ll have a wider financial safety net to rely on when your cash inflows are lower than predicted. 

Here are three simple and effective ways to increase liquidity and safely manage cash flow for your farming business:

  • Take advantage of your savings or liquid investments. Tapping into your savings will likely be your quickest and easiest option to cover any unexpected expenses. In addition, selling liquid assets – such as stocks and mutual funds – is a fast way to access some emergency funds.

  • Renovate, don’t replace. Do you have expensive farm equipment that you’re thinking about replacing? Before you do, we encourage you to consider seeking repair services first. A professional will likely be able to get your equipment back in working order at a fraction of the cost.

  • Build a comprehensive budgeting plan. Whenever the reality of our annual cash flow exceeds our original expectations, it’s crucial to start cutting back on spending. Not only business-related spending, but all other personal expenditures as well. To build a practical budgeting plan, start by conducting an inventory of all non-essential expenses (leisure travel, entertainment, restaurants, etc.). Once you have an idea of where you can cut back, the next step is to build a spending plan. If you need any help along the way, we recommend contacting a local financial advisor.  


Keep Your Business Secure with Farm Refinance Options

Lastly, farm refinance options are a straightforward and highly effective way to give yourself some financial flexibility during lean years. When you refinance with MSF Agriculture, we’ll ensure that your new loan is optimized to keep your business running smoothly.

Start Searching for Farm Refinance Options Today

Our expert lenders are standing by and ready to help you find the perfect refinance option for your farm loan. Contact us today to get started!