It is all negotiable.

In a bankers eyes (or examiners) there can never be too much collateral.

He may have just given you a good reason to check around and see what other competitive banks requirements and needs are. They may be more competitive and want your business they may not need such requirements.

Another alternative is to use seed company and machinery company financing next year and that might change your cash flow situation where you could self finance the rest of the inputs and forgo an operating loan all together. Just a thought.

If you are comfortable with it, it likely is not a problem. If you are uncomfortable with it, push back.

John