Tired of being on the sidelines, farmers want a seat in the game; when the music stops, lenders don’t want to be caught holding bad loans.

Following years of a booming US farm sector when banks were lending to farmers with lots of income and collateral and prices for commodities and farmland were surging, banks are growing more cautious and bailing on the troubled industry.

Agriculture in the US is in crises. Income and cash flow are decreasing; debt levels are rising; real estate – a farmer’s greatest source of equity – is highly leveraged. A confluence of negative events, including environmental calamities – such as historic flooding; political issues – primarily the trade war and tariffs with China; and years of crop/commodity concentration with falling prices and oversupply, has created a distressed situation. Farm income has been cut nearly in half since 2013 while current debt is up over $100B in the last 10 years, on track to $427B.

“We keep tightening our belts, but we’re running out of holes,” said Pat Sheldon, a soybean farmer recently interviewed by NBC News.

Farmers as a group are honest, proud, hard-working, often entrepreneurs or generations of family businesses. As they continue to try to mange uncertain markets and wait out a trade deal, they do not want to be left on the sidelines and lose their seat to others around the world. Many, like Sheldon, are being forced to find other sources of income in order to survive.

“We want Trade, not Aid,” insists fourth generation Soybean Farmer Scott Henry, recently interviewed by Fox News.

It’s difficult to find capital providers with appetite for the current risk in this industry, banks are especially averse. “If you have any signs of trouble, the banks don’t want to work with you,” according to Gordon Giese, dairy & corn farmer in WI (see referenced Reuters article below). As demand for farm credit continues to grow, nontraditional lenders will be the best partner and advisor to farmers who want to make sure they outlast the gloomy music.

“As farmers, we don’t just think in 1-year increments, we like to think about the long-term and what we are doing in our businesses. So many of our investments and purchases are large dollars that span multiple years,” said Henry.

For Henry, Giese and other US farmers just like them, it will be critical to find a partner and advisor who adds value, understands the industry with its unique challenges, is resourceful and can ultimately provide the best cost of capital with the most intelligent structure to meet the specific needs of each farmer and situation. Business Capital has the experience, expertise and a long track record of providing capital to the US Ag industry.