There are many poultry construction questions that arise from borrowers before considering an agriculture loan from Live Oak Bank. From when to start the building process to how to submit payments, we strive to be as clear and helpful as possible when working with customers. Here are the five questions we get the most, and the answers to them.The 5 Most Common Poultry Construction Questions Borrowers Have #PoultryFinancing Click To Tweet
Q: Do I get the leftover money if construction comes in on a budget?
A: Yes. The amount will vary based on the original loan amount and whether we need to reallocate from the working capital line item to cover any construction over-runs. Though, it is common for borrowers to complete construction and walk away with working capital so they can pay any farm bills, buy new tractors, etc..
Q: How do the payments work to pay down the loan?
A: We get an assignment on the borrowers’ flock check, so whenever they get paid we get paid directly as well. This system is convenient for the borrower because they do not have to make a physical payment, it automatically comes to us. Our construction borrowers typically have one year of interest only; this means no payments are due for the first 12 months (this varies based on loan size).
Q: If I get an extra flock in, do I get to keep the money?
A: Yes, as long as the annual payment has been satisfied we can refund the extra flock check.
Q: When can I start construction?
A: As long as the loan is closed, and the borrowers’ grader (first stage of construction) is available and has a signed bid in the file, they have our green light to go ahead. We don’t allow borrowers to start before the loan closes.
Q: What is the common turn time to get payments to my contractors?
A: Once we get everything we need from the contractor, we can get payment to them directly within 24-48 hours. There are many benefits to having a construction officer dedicated to your loan and having officers who work in the industry. In our department, we work with the vendors/contractors directly to make it convenient for the borrower. We always get their approval to pay before releasing funds as well.