Question 1

What makes Harvest Capital Company, LLC different from other lenders?

Accepted Answer

Harvest Capital strives to match the financing you need today with a structure that will benefit you in the future. We understand that each transaction and each borrower is different, but whenever possible, we believe operational and short-term assets should be financed with short-term debt and long-term assets respectively.

We also believe it is beneficial to the borrower to separate specific parcels of real estate with separate loans. This means the operation doesn’t have all its real estate holdings under the same note and mortgage with one interest rate instrument.

Question 2

What are your interest rates?

Accepted Answer

Harvest Capital's loan products are priced off a spread or margin above the yield curve for United States Treasuries. As a result, rates change on a daily basis. Today’s yield on Treasuries can be found in several sources, including Bloomberg and the Wall Street Journal.

Actual note rates to the borrower are typically between 2.0% and 3.5% over the yield for the Treasury instrument that corresponds to the adjustment period. For example, a five-year adjustable rate would be 2.0% to 3.5% over the rate for the five-year Treasury bill.

Question 3

Do you write loans for livestock or equipment?

Accepted Answer

We offer a Revolving Line of Credit (RLOC) product that is secured by a first-position mortgage on real estate. It can be used to purchase equipment, cattle, real estate, general operating expenses, or all of the above.

The minimum loan size is $200,000 with draw line terms of five or ten years with the total term being thirty years. The interest rate is variable during the draw period and is based on a one-month VRM (variable rate mortgage). The loan balance is converted to a term loan after the draw period with semi-annual principal and interest payments.

Question 4

What are your payment structures?

Accepted Answer

Payments can be made on an annual, semi-annual, quarterly, or monthly basis, depending on the type of loan. The most typical structure involves semi-annual payments with amortization schedules of fifteen, twenty, twenty-five, or thirty years with matching terms.

Question 5

Do you have prepayment penalties?

Accepted Answer

Most of the loans Harvest Capital originates do not have prepayment penalties. However, there are times when prepayment penalties are a necessary part of the mortgage. Typically, these notes allow payment in full without penalty on each interest rate adjustment date or include a lock-out period at the beginning of the loan term.

In either situation, you can rest assured that Harvest Capital is looking out for your best interests. We do everything possible to limit our customers’ exposure to penalties and fees.

Question 6

What is the maximum loan-to-value?

Accepted Answer

This will depend on the particular transaction. The maximum is 70% of the appraised value, but most loans fall into the range of 50% to 65% loan-to-value (LTV).

Question 7

Do you write second mortgages?

Accepted Answer

All our loans are secured by a first mortgage position on real estate.

Question 8

Will I need to have my property appraised?

Accepted Answer

Unless an acceptable appraisal has been published within the past year, a new appraisal will need to be completed.

Question 9

What are the closing costs?

Accepted Answer

Closing costs are generally between 1.50% and 3.50% of the loan amount. This includes any and all costs associated with the placement and closing of the loan including all origination fees, title insurance, escrow, legal, appraisal, and any other miscellaneous costs.

The percentage of loan closing costs decreases as the loan amount increases. Harvest Capital will be able to give a very accurate estimate of closing costs at the time you make a formal application for a loan.

Question 10

Are there any up-front fees?

Accepted Answer

Two fees may be required before commitment:

The lender’s application fee is typically due when an application is signed. However, this fee is refunded (less hard processing costs) if the loan is not committed.
The appraisal fee is collected when an appraisal is engaged.

Loans are either committed based on an existing appraisal or subject to a forthcoming appraisal. Harvest Capital's goal is to keep your financial exposure to a minimum until you have a loan commitment you are comfortable with.

Question 11

How do I get started?

Accepted Answer

In order for Harvest Capital to evaluate your financial condition, the following information will need to be provided for each individual and financial entity involved in the transaction:

Current balance sheet including:
Detailed explanations of assets and liabilities, including interest rates and terms
Debt payment schedules with a breakdown of principal and interest payments
Independent verification of balances from copies of billing statements
Three to five years of historical tax returns
Year-to-date income statement for the current year
Budgeted income and expenses to close out the year
Budget for the next year of operations

The following information will need to be provided for the proposed security:

Historical production records
Description of improvements
Copies of water rights

Visit How to Apply for more details.