A Farm Line of Credit That Does Not Run Through Your Land

It is the second week of harvest. The labor bill is due Friday. The fertilizer invoice from spring is past terms. Your shipper will settle up, and the money is real, but it lands weeks after the bills do.

You already know what happens next. You stretch a vendor. You call the packer and ask for an advance. You put inputs on the corporate card and eat the rate. Or you skip the block that would have been worth harvesting.

Having a bank line does not mean having money. A line you have already drawn to the cap in July is not available to you in August, and neither is one that needs three weeks of underwriting before it grows. If that is where you are, or if the bank was never an option in the first place, this post is for you. We will cover why it did not work, how our line works, and exactly what it costs.

Why the bank line did not work

Nothing is wrong with your operation. The mismatch is structural.

 The collateral is the land, and you lease your ground. Most farm operating credit is secured. Farm Credit associations and ag banks look for a lien on real estate, equipment, livestock, or crops. If you farm leased acres, that model has nowhere to attach.

Your marketing agreement counts for nothing. You have a signed agreement with a shipper, a co-op, or a processor. It is the most predictable thing about your season. But traditional ag underwriting is built around debt-to-equity ratios and land equity, which leaves little room to value a marketing agreement as a source of repayment.

Specialty crops are not the model the system was built for. Ag lending grew up around corn, soybeans, and cattle, where price data is deep and crop insurance is standard. Strawberries, leafy greens, wine grapes, stone fruit, and nursery stock do not fit the template as cleanly.

The ceiling is fixed, and raising it means starting over. Your note was sized in the winter off a projection. When you hit the cap in July, more room is not a phone call. It is a new request, new financials, and a trip back through underwriting. The answer may well be yes. It will not be yes this week.

The calendar is wrong. Your cash crunch shows up mid-season because a picking crew ran longer than planned or a buyer pushed payment. Annual credit does not flex on that timeline.

When Thombar financing makes sense

You have a bank line, but you cannot draw on it. The note was sized in January for the season you planned, not the season you got. Once you are at the cap, more room means going back through underwriting. Most growers who use us have a bank line. They just cannot use it this week.

The bank's answer will take longer than your vendor will wait. Even when the answer is going to be yes, the timeline is weeks. Your labor contractor gets paid Friday or the crew does not show Monday. The fertilizer rep needs an answer before the next application window. Approval that arrives after the fact is not approval.

You need to pay a vendor before your buyer pays you. The input bill, the labor contractor, the custom harvester, the trucking invoice. All due long before the shipper settles.

You want to pre-book inputs ahead of the season. Lock in supply and pricing before the rush, without draining the account you need for payroll.

Your supplier offers an early-payment discount. If the discount beats the financing fee, you make money by taking it. Math below.

How Thombar financing works - four steps

Buy and get invoiced. You purchase from any vendor. Input supplier, labor contractor, packaging house, mechanic, hauler. They invoice you the way they always have.

Upload the invoice. Upload it in your Thombar portal and choose a 30, 60, or 90 day window, matched to when your receivable lands.

 You get paid. Funds arrive in your bank account within 24 hours and you pay your vendor yourself. That means any vendor works. Farm labor contractors, custom harvesters, haulers, packaging houses, the shop in town that rebuilt your pump. If you can upload the invoice, we can fund it.

Repay later. We auto-debit your account at the end of the window you chose. Pay back early and you are eligible for a rebate on the fee. If your receivable runs late, tell us before the debit date and we can extend the window.

What we look at

Three things: your marketing agreements, your cash flow history from your connected bank accounts, and a soft pull on your personal credit for identity verification and underwriting. A soft pull does not affect your credit score, and we never do a hard pull.

Not your land. Not your equity.

What we require, and what we do not

We do require a personal guarantee from the owner. That is standard for business credit at this size, and it is what lets us skip the collateral requirement that keeps growers on leased ground out of the market. We would rather tell you here than at the signature page.

We do not require:

Land, crops, or equipment pledged. No lien on your operation, and no need for equity in ground you may not even own.

A long-term contract, minimums, or maintenance fees. No cost at all unless you draw.

Offers come back within 48 hours. Lines run up to $250,000, with flexibility above that depending on the application. Specialty crops, all fifty states. No minimum time in business, though a longer operating history strengthens your application.

What it costs

One flat transaction fee per draw. Not interest running on a balance, not a rate that ticks while the money sits unused. You see the fee in dollars before you accept the draw, and it does not change after.

The fee is tied to the window you pick. Thirty days costs less than ninety. Pay it back before the window closes and you are eligible for a rebate on the fee. Draw nothing and you owe nothing, because there are no maintenance fees or minimums.

What your fee actually is depends on your application. Your marketing agreements, your cash flow history, and your time in business all move it. That is why we quote it to you instead of posting a number that would be wrong for most growers.

So be clear-eyed. This costs more than a bank operating note. It should, and here is the honest reason why.

Your bank prices its line against your land. If the loan goes bad, there is an asset to take, and that is why the rate is low. We do not take your ground, your crop, or your equipment. A personal guarantee is not a substitute for real collateral, so we are carrying more risk than your bank is, and that risk gets priced into the fee. We think the trade is fair for the right situation. When it is not, we would rather you use the cheaper money.

The comparison that actually matters

It is not our fee against a bank rate you cannot get. It is our fee against the alternative in front of you today.

Take the early-payment discount case. Your supplier offers a discount for paying now. You finance the invoice, take the discount, and repay when your receivable lands. If the discount is bigger than the fee, you come out ahead.

Here is what that looks like. Say your quoted fee works out to 2% on a 30 day draw, against a $100,000 input invoice:

The rule generalizes: the discount has to beat the fee on your draw. Below that line, financing costs you money. Above it, you are getting paid to pay early. Your Thombar portal runs that comparison against your actual quoted fee before you draw.

The discount case is the easy one to calculate. Harder to put a number on, but usually bigger: what it costs you to stretch a vendor you depend on, or to leave a block unpicked because the crew could not be paid.

And if the answer is that you should wait and pay cash, do that. The line is there for the weeks you need it, not the ones you do not.

Read that first row again. If you can draw on a conventional operating line, draw on it. We are not trying to replace your bank. We are for the weeks your note cannot cover, and for the growers the bank cannot underwrite at all.

FAQ

Do you require collateral?

No. We do not take a lien on your land, crops, or equipment, and you do not need land equity to qualify.

Do you require a personal guarantee?

Yes. The owner signs a personal guarantee. That is standard for business credit at this size, and it is the reason we can skip the collateral requirement that keeps most growers on leased ground out of the market.

Do you pay my vendor directly?

No. The money goes to your bank account and you pay your vendor. Your vendor relationship stays between you and them.

Do I need an invoice to draw?

Yes. You upload the vendor invoice you are covering.

Will applying hurt my credit score?

No. We do a soft pull only, which does not affect your score. We never do a hard pull.

What crops do you cover?

Specialty crops, which includes fruits, vegetables, tree nuts, wine grapes, nursery crops, and floriculture. If you are not sure whether your crop qualifies, ask us.

Which states do you serve?

All of them.

How fast is funding?

Offers within 48 business hours of a complete application. Once you draw, funds can reach your account within 24 hours.

Is there a minimum size or a minimum time in business?

No minimums. A longer operating history strengthens your application, but it is not a gate.

Can I fund a farm labor contractor invoice?

Yes. FLC invoices fund, along with input suppliers, custom harvesters, haulers, packaging, and repair shops. If you can upload the invoice, we can fund it.

My shipper pays late. What if the money is not there on the debit date?

Tell us before the debit date and we can extend the window. That is the normal path and it is why the option exists. If something goes wrong after that, call us. We would rather build a plan around when your money actually lands than have a problem neither of us saw coming. You did sign a personal guarantee, so this is a real obligation, not a handshake. But we are not in the business of chasing growers. We are in the business of having you come back next season.

Can I use this if I already have a bank line?

Yes, and most of our growers do. This is not a replacement for your operating note. It covers the weeks your note cannot.

How is the fee calculated?

It is a flat transaction fee per draw, set by your application and shown to you before you accept. It is not interest accruing on a balance.

What if I pay it back early?

You are eligible for a rebate on the fee.

Do I have to use it?

No. No minimums, no maintenance fees, no cost unless you draw.