| McHusker - 2/26/2015 21:10
for those of us that farm, when we hear that 1. the banker tells us what to plant or 2. the banker gives us x $ to play with, we can fill in the blanks. It is not about "low cash flow or negative cash flow, as some may say," it is about "low equity" operations, pure and simple.
A borrower with high equity and negative cash flow would borrow against a clear farm to generate positive cash flow. I argue it is all about positive cash flow for bank regulators. Once you can't generate positive cash flow somehow, it will domino. They'll try and call all your loans till it balances it out. Downsize or borrow against the home farm to generate positive cash flow. I wonder if it even matters what your equity position is, only if you have something without a lein already. I will never get an op loan again, until the farm is paid for. If folks are doing that, that is the bubble IMO.
edit: Perhaps they would approve negative cash flow, if in a favorable CASH position. It would be interesting to know more. Nobody really seems to know the facts.
Edited by SquareG 2/27/2015 07:16
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If 2009-2010 is 2014-2015 here it is...
