I'm applying for a loan to purchase some agricultural land and I'm working on my business proposal. I'm currently in Ottawa, Ontario (Canada) and I'm looking to buy in Quebec. Right now I'm working on the Strengths, Weaknesses, Opportunities and Threats. I was hoping that some of you with more experience could help me add a bit to my SWOT analysis. Thanks so much!
-Sole proprietor with a Permaculture Design Certificate -Production diversity -Healthy produce -Great location, forest already established -Minimizes environmental impact
-Significant capital required for startup costs -Limited data on permaculture in the region -May take time for system to mature -Starting from scratch
To get a loan from a bank, you first of all have to prove that you don't need it.
My wife and I decided with the tree farm taht we wouldn't borrow money. It means that I really have to want something to buy it. A bobcat would be useful. But I've got a tractor with a FEL, and that's enough.
I'd love to have a potting machine. But with a 1 person operation (with some high school kids) a shovel and a pile of dirt works. (We've moved 45 cubic yards of compost/topsoil into pots using shovels since the 10th of September.) A potting machine is 40 grand. Power to where it would be used is another 30.
Save your money. Buy a shovel. It doesn't have to happen all at once.
The inherent problem I am seeing is that a bank is looking at a SWOT Analysis from a financial sense and much of what you write is about physically growing things. Do not take offense to that, most farmers are farmers because we grow things, if all we did was chat about numbers we would be bankers (interestingly my wife is a banker). But that does not help a farmer get a loan. If you need money from a bank, you need to speak their language; you need to assure them that you can pay them back, and that means speaking in dollars.
Here is an example. You wrote Healthy Produce...well, they already ASSUME you are going to do that, a farm cannot exactly sell rotted tomatoes. They need to know HOW you plan to produce Healthy Produce and WHY it will be better then your competion, in Permie cases, against the competion which will be Organic Farms.
There is nothing wrong with your points, you just must take the emotion out of the list, and twist it around so it makes more fiscal sense. How does "minimizing environmental impact" allow you to get more money for your product, or lower your production costs? Minimizing environment impact means little if the farm only lasts 5 years and reverts back to conventional farming because the farm failed.
Ideally you want to counter a weakness with a strength, and most times it is not "spin". For instance, my farm is very rural so I am a long way to a good market, but that also means I have very little competition here. See how that worked...it was a money-based statement, but took the liability of being a long ways from my PA market, and put it in a good light...no competition! That is banker speak.
Learn to talk in numbers and you will get your loan.
Something must be done about this. Let's start by reading this tiny ad: