Every farm lender will tell you they underwrite to the same three Cs: credit, cash flow, and collateral. They are right. What they do not always tell you is the order they apply them in — and that order shifts depending on the lender, the transaction size, and the property type.
Credit
Personal and entity credit is the screen. FICO scores in the 700s and clean trade lines are expected. Late payments, judgments, or unresolved collections will get the file deferred or declined regardless of the rest of the package.
Cash flow
On working farms, lenders calculate a debt-service coverage ratio against normalized cash flow — typically a multi-year average rather than the most recent year. They will haircut commodity prices to long-run trends and stress-test against rate increases.
Collateral
Agricultural appraisals are technical documents. Lenders look at productivity ratings, water access, soil class distribution, and recent comparable sales of working ground in the same county or productivity band. Trophy or lifestyle premiums get partially or fully discounted from loan-basis value.
