Financing Niche Markets: Loan Programs to Assist Swine Producers

Presented By: Kate Winkel –Corporate Credit Analyst Duane Paturalski –Senior Financial Services Officer Lee Rodgers –Senior Financial Services Officer

GreenStone FCS Mission To promote the business success of our customers and the rural community by being the best at providing credit and financial services.

GreenStone FCS Provide credit and financial services to the rural and agriculture industry Cooperative organization with 15,000 members $3 billion organization Diverse loan portfolio

Market Segments Commercial Producers Traditional Producers –Part time farmers –Full time farmers AgriConsumers –Part time farmers –Rural residents

Loan Products Commercial Loans –Operating loans –Capital & intermediate term loans –Capital line of credit Real Estate Loans Leasing Products

Loan Programs Traditional Swine Production Young, Beginning & Small Production Contract Swine Finisher Production

Underwriting Standard Solvency (Owner Equity) –OE –ability to withstand periods of financial stress Liquidity –Working Capital / Adjusted Gross Income –Ability to withstand short term adversity

Underwriting Standard Cont. Current Ratio –Current assets compared to current liabilities Capital Debt Repayment Capacity –CDRC –Ability to make scheduled payments and replace depreciable assets Loan to Appraised Value –LTV –Level of lending compared to collateral value

Traditional Standards StandardTraditional Solvency≥ 50% Liquidity≥ 15% Current Ratio1.5 : 1 Repayment Capacity≥ 115% Loan to Value – Short / Inter. Term ≤ 75% Loan to Value – Long Term ≤ 65%

Young & Beginning Standards StandardYoungBeginning Solvency≥ 25%≥ 35% Current Ratio1 : 1 Repayment Capacity≥ 100%≥ 115% Loan to Value - Short Term ≤ 75% Loan to Value – Inter. Term ≤ 90%≤ 75% Loan to Value - Long Term ≤ 85%≤ 75%

Small Producer Standards Expected to meet normal credit standards unless offsetting strengths exist. StandardSmall Solvency≥ 50% Liquidity≥ 15% Current Ratio1.5 : 1 Repayment Capacity≥ 115% Loan to Value – Short / Inter. Term≤ 75% Loan to Value – Long Term≤ 65%

Contract Swine Standards Standard FSA Guarantee Non Guarantee Solvency≥ 10%≥ 25% Current Ratio1 : 1 Repayment Capacity≥ 100%≥ 115% Loan to Value≤ 97%≤ 80%

Customer Relationships Small ( ≤ $250,000 ) –Requires minimal documentation provided Medium ( ≥ $250,000 & ≤ $1,000,000 ) –Requires moderate documentation provided Large ( ≥ $1,000,000 ) –Requires extensive documentation provided

Request Preparation Our expectations: –Complete GFCS loan application –Complete balance sheet (current) –Income tax returns (three years) –Business plan or projected annual operating budget –Complete plans, specs and costs for the project including site development costs

Request Preparation Our expectations continued: –Copy of the proposed grower contract –Compliance with environmental regulations Generally Accepted Agricultural & Management Practices for Site Selection & Odor Control for New & Expanding Production Facilities National Pollutant Discharge Elimination System Permit (general or CAFO)

Your Expectations Experienced and knowledgeable loan officers Timely responses Competitive interest rates Flexible terms to meet the operation’s needs Willingness to work with you

Our vision is to be rural America’s first choice for financial services. We look forward to working with you.