Farm financial spreading from Schedule F to term debt coverage, every figure linked to its page
A full farm spread in minutes, every figure linked to its page.
See one case, screen by screen ↓Putting a farm borrower’s tax returns, balance sheets and inventory counts into the lender’s spread so the credit can be judged on comparable numbers: accrual-adjusted net farm income, the balance sheet at market and cost, and the farm ratios. Farm Financial Spreading reads the whole package, builds a three-year spread with every figure linked to its page, and hands the ag credit analyst a spread to confirm and sign.
How to choose AI solutions for lending →
Updated
Every fall the renewals come in at once. Each farm file is a 1040 with Schedule F, Form 4797 and Form 4562, a balance sheet on the lender's form — often in pencil, mixing cost and market values — a handwritten grain count, a co-op prepay invoice, supplier statements, a spouse's W-2 and a family living worksheet. The credit analyst re-keys all of it before anyone can judge repayment.
Then the real work starts. Schedule F is cash basis, so a farm that held its crop into the new year looks weaker than it is, and the analyst has to rebuild accrual income by hand from two balance sheets. Grain is priced at whatever the borrower hopes for. A new combine note or a CCC loan shows up in the tax return before it shows up on the balance sheet. Family living costs and off-farm income are often missed. Miss one liability and the coverage ratio in the credit memo is wrong.
Estimated split for one farm review package, by hand and with the solution, in hours.
Six specialist agents read the returns, balance sheets and counts and build the accrual spread; the credit analyst confirms and signs.
Halvorsen Farms — 2,860 acres of corn and soybeans and 220 cows in Buffalo County, Nebraska — asks to renew its operating line at $1,850,000, up from $1,450,000. Credit committee is Thursday 22 October. Here is the file, screen by screen, in the working solution.
Jenna's queue shows seven farm files and $18.14M requested. Two are waiting on documents with reminders already sent. Halvorsen Farms is complete — 27 of 27 documents, received Tuesday 6 October, committee Thursday 22 October — with adjustments to confirm.
“Every farm financial package read as it arrives — tax returns, balance sheets, inventory counts — and ranked by credit committee date.”
The tax return reader maps 61 lines of the 2025 return and ties Schedule F to the 1040. The balance sheet reader ties 31 December 2024 to the 2025 opening, line by line. The inventory and price checker reads the handwritten grain count — 168,000 bu of corn and 24,300 bu of soybeans in 8 bins — and flags corn at $4.35 against a $3.95 price sheet. The debt and liability finder finds a CCC loan and a combine note that are not on the balance sheet.
Each step shows what it read, what it found and how long it took.
The home is the spread itself, laid out like Wexmoor’s form FB-2: Schedule F on a cash basis, the balance sheets at two dates, family living and repayment, the corrected balance sheet. Every cell is pinned to its line. On the tax return alone, net farm income is $173,500 and term debt coverage is 1.11x — below the 1.25x minimum.
“Showing the tax return · pin the changes between the balance sheets”
Crop inventory rose from $778,700 to $918,750; pinned from both balance sheets, +$140,050 alone takes coverage from 1.11x to 1.39x. Market livestock, receivables, prepaid expenses, accounts payable and accrued interest follow, each tied to its page. Accrual-adjusted net farm income lands at $327,550 and term debt coverage at 1.42x, while working capital to gross revenue falls to 8.6% as accrual revenue rises.
“6 of 6 accrual changes pinned · the spread is accrual-adjusted”
Net farm profit of $130,700 on Schedule F, plus the $42,800 Form 4797 gain, plus $154,050 of accrual adjustments: $327,550. Three years side by side show why it matters — the Halvorsens hold grain into the new year, so Schedule F trails what the farm earns: crop inventory rose in each of the three years.
Corn priced above the bid (−$67,200). A CCC loan of $88,000 reported on Schedule F line 5a but not listed — and 40,000 bu under the CCC’s lien come out of Wexmoor’s collateral. A $372,000 Northline combine note found from Form 4562 and the 9 December bank payment. Family living stated at $48,000, below the $72,000 floor. Nine checks passed beside them, from Schedule F tying to the 1040 to earned net worth reconciling within $6,150.
Each exception has two answers: accept the fix, or ask the borrower.
With the corn repriced and both liabilities added, the current ratio is 1.16 — the borrower's form said 1.37, and 1.16 sits in the vulnerable band. Debt to asset is 23.4% at market, strong. Net worth is $12,136,450; the form overstated it by $527,200.
Capacity of $695,950 covers $490,400 of scheduled term payments 1.42x. Jenna moves the levers: corn sold at $3.55 still covers 1.28x; without the combine note, the submitted balance sheet would have shown 1.74x. The trend is down — 2.32x, 1.60x, 1.42x.
The ratio and repayment analyst informs the decision. It never rates the credit or decides the loan.
The ratio and repayment analyst has drafted the summary for the credit memo — earnings, repayment, liquidity, the four adjustments with their pages, and what to consider: a marketing plan for the unpledged corn before 1 March 2027, a lien search for Northline’s security interest and a mid-year balance sheet. Jenna confirms all four adjustments and signs with the meaning “Spread reviewed — figures and adjustments confirmed”. The summary goes to Travis Lindgren’s credit memo for Thursday’s committee.
“Your signature, the time, the figures and every adjustment are written to the audit trail. A later change needs a new version of the spread.”
The same Halvorsen Farms review, seen by the four people who carry it to committee — what their fall looked like, and what it looks like now.
Six specialist agents read the returns, balance sheets and counts and build the accrual spread; the credit analyst confirms and signs.
Reads the 1040, Schedule F, Forms 4797 and 4562, Schedule SE and W-2s, and maps every line to the spread with its page. Ties Schedule F line 34 to the 1040 and line 14 to Form 4562.
Reads the lender’s balance sheet form or the CPA’s statements, including handwritten entries, at cost and market, and ties the opening to last year’s ending.
Reads handwritten grain and livestock counts by bin and by class, prices them at the lender’s year-end price sheet, and notes grain under a CCC loan.
Converts cash-basis Schedule F to accrual-adjusted net farm income the Farm Financial Standards Council way: the change in inventories, receivables and prepaid expenses, less the change in payables and accrued interest.
Cross-checks the listed liabilities against interest paid, new depreciation, bank statement payments and CCC loans, and reports each missing liability with its evidence.
Computes the 21 farm measures for three years, repayment capacity, term debt coverage, the trend and a price stress, and drafts the summary for the credit memo.
Confirms each adjustment and signs. The agents propose; a named person decides.
Ask about any figure, document or measure in a spread — or try a what-if. Every answer points to its page.
Why does the tax return understate 2025 income?
Schedule F is cash basis. It shows net farm profit of $130,700, $173,500 with the Form 4797 gain. On an accrual basis the farm earned $327,550: the crop inventory rose $140,050, receivables rose $33,700 and $62,500 of 2026 inputs were prepaid in December, less $55,700 more owed to suppliers. On the tax return alone coverage would be 1.11x; accrual-adjusted it is 1.42x.
What liabilities are missing from the balance sheet?
Two, both found in the tax return rather than on the form: a CCC marketing loan of $88,000 on 40,000 bu, from Schedule F line 5a, and a $372,000 combine note with Northline Implement Finance, from Form 4562 line 6 and the 9 Dec payment. With both added, the current ratio falls from 1.37 to 1.16.
Does Halvorsen still cover its term debt at $3.55 corn?
Yes, just. Each 10¢ on the 168,000 bu on hand moves income by $16,800. At $3.55, accrual income falls to $260,350, capacity to $628,750, and coverage to 1.28x against $490,400 of payments — still above the 1.25x minimum. The break-even is about $3.46.
Draft the spread summary for Travis’s credit memo
Drafted on the summary screen for you to edit and sign: accrual income $327,550; coverage 1.42x, 1.28x at $3.55 corn; trend 2.32x → 1.60x → 1.42x; liquidity thin — current ratio 1.16, working capital 8.6% of revenue; solvency strong at 23.4% debt to asset. It suggests a marketing plan for the 128,000 bu of unpledged corn.
13 screens from the working solution, on its sample data. Pick one to see it large.
The rules every farm spread is built and checked against are settings, versioned and on the audit trail.
| Setting | Default | Choose from |
|---|---|---|
| Year-end price sheet | Corn $3.95 · soybeans $10.50 a bushel | Your prices and sources, by commodity, livestock class and land |
| Minimum term debt coverage | 1.25x | Set up or down; below it the summary says the line does not cash-flow |
| Family living floor | $72,000 for four, +$9,000 a person | $72,000 for four, +$9,000 a person · $66,000 for four, +$8,000 a person · $80,000 for four, +$10,000 a person |
| Capital replacement allowance | $120,000 a year | $120,000 a year · $100,000 a year · Equal to depreciation |
| Income basis | Accrual-adjusted, three-year view | Accrual-adjusted, three-year view · Accrual-adjusted, latest year · Three-year weighted 3-2-1 |
| Earned net worth tolerance | $10,000 or 0.1% of assets | $10,000 or 0.1% of assets · $5,000 · $25,000 |
| Required documents | 3 years of returns, 2 balance sheets, inventory count | 3 years of returns, 2 balance sheets, inventory count · 2 years of returns, 2 balance sheets · Latest return, balance sheet, inventory count |
| Ratio bands | Current ratio below 1.30 vulnerable, above 2.00 strong | Vulnerable · stable · strong, for each measure |
Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.
“demo” = seen in the working solution, on its sample farm data · “target” = the design goal, measured in the live solution · “estimated” = our estimate · “typical” = published figures and standards (USDA ERS Farm Income Forecast, Sep 2026 — net farm income forecast down 2.6% in 2026; Kansas City Fed Survey of Terms of Lending to Farmers, Q1 2026 — non-real-estate farm loan volume up nearly 50% year on year; Farm Financial Standards Council, Financial Guidelines for Agricultural Production — the 21 measures). People, farms, lenders and companies named on this page are fictional — characters and sample data in the working solution.
Putting a farm borrower’s tax returns, balance sheets and inventory counts into the lender’s spread so the credit can be judged on comparable numbers: accrual-adjusted net farm income, the balance sheet at market and cost, and the farm ratios. Farm Financial Spreading reads the whole package, builds a three-year spread with every figure linked to its page, and hands the ag credit analyst a spread to confirm and sign.
The accrual adjuster starts from Schedule F line 34 plus the Form 4797 gain on raised breeding stock, then adds the change in crop and market livestock inventory, receivables and prepaid expenses and subtracts the change in accounts payable and accrued interest between the two balance sheets — the Farm Financial Standards Council method. Each change is pinned to both balance sheet dates and its page.
That is the debt and liability finder’s job. It looks for the financing behind every asset placed in service, the liability behind every recurring loan payment on the bank statements, and CCC loans reported as income. It adds a liability only with evidence and never removes one the borrower listed.
At your year-end price sheet — for example the local co-op cash bid for corn and soybeans and auction reports for cattle. A price above the sheet is flagged, contract prices need the contract, and grain under a CCC loan stays in inventory with the loan as a current liability and out of your collateral.
The 21 Farm Financial Standards Council measures for three years — liquidity, solvency, profitability, repayment capacity and financial efficiency — banded vulnerable, stable or strong against your policy, plus capital debt repayment capacity, term debt coverage and a price stress on unsold inventory.
Yes. The agents recommend adjustments; the ag credit analyst confirms each one, or asks the borrower, and signs the spread. The agents never rate the credit or decide the loan, and loan review sees every spread where a stated figure was kept over the policy.
Yes. The spread follows your own form, and the price sheet, coverage minimum, family living floor, replacement allowance, income basis, ratio bands, required documents and who signs are all settings, versioned and on the audit trail.
The Agentic Solution Engine builds and deploys it from your requirements — your balance sheet form, credit policy, price sheet and a sample of past farm files — and it goes live once every quality gate has passed. We will show it to you on your own farm files first.
Renewal packages ready weeks before planting, not the week of.
1-min demoFSA Guaranteed Loan OriginationComplete applications assembled in a day, not a week.
1-min demoFSA Guaranteed Loan ServicingNo missed guarantee deadlines; loss claims filed complete the first time.
1-min demoWe’ll spread a sample of your own farm review packages on your form and your price sheet.