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EC North Dakota | I started by borrowing enough money from an uncle, unsecured, so farm credit would loan me the rest. I've never inherited anything.
I paid him back the first year. But I've had an operating loan for 30 years straight and have never paid it back.
It's good advice to pay your operating loan off every fall. Otherwise it's too easy to defer your income taxes or lose track of exactly how you're performing.
I could pay mine off but I've got to many reasons not to. (Marketing, income tax, land down payments)
Borrowing money is a good thing if you're getting a better return than you're borrowing at. The trouble with farming is, on average, it doesn't have a very high return.
I do believe we should have a goal, age, stage, where we are done borrowing. But every time I approach that, another opportunity comes up.
My wife and I had 4 grandfathers who were all very successful, in very different ways. They each operated for years after they were done borrowing.
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Should a established farm need an operating loan every year??
