Financial Options for Growers
How many times have you heard this comment in the greenhouse industry – “How am I going to pay for it?” In this time of volatile energy costs and increased competition in the marketplace, greenhouse operators continue to hesitate and ponder about upgrading their present processes.
With so many demands on your cash and capital budget, it becomes a challenge to decide which equipment to install and how to pay for it. It is okay for a grower/ owner to stop and take a second look at how they might reduce their input costs or increase their yields by taking advantage of technological advances. It may be a great idea with solid paybacks, but installing the new equipment requires the correct financing option, and that requires planning and insight. Therefore, the goal of this article is to ensure that you know what financial options are available to you, the greenhouse grower/owner.As a greenhouse grower, superintendent and manager from 1970 to 2004 and now a financing specialist for the past ten years, I have been welcomed into many agricultural businesses to see how they plan and implement their financing strategies. I believe that this shared experience will help you as an individual grower and benefit the greenhouse/agricultural industry as well.
The main financing options include paying cash, borrowing from the bank or using lease financing. Paying cash seems the easiest and has historically been the chosen option for greenhouse growers who believe in the mantra…”don’t buy, until you can pay for it”. However, with the increasingly sophisticated and significantly larger greenhouse operations of today’s marketplace, leverage (borrowing) has become more of an acceptable and desirable option to use.