Buehler - 2/12/2016 09:23
For some reason? Are you really serious? Have you thought about reversing the roles with him for a moment? Would you loan money to anybody without a guarantee by the principal? If so, You need to start up Your own bank, advertise Your lax lending policies, and the world will beat a path to Your door. Won't take you very long to figure out why Your banker wants your John Henry. Besides all that, Im sure banking regulators require it now.
I presume you are responding to me. Yes. I have put thought into it. I have an entity. The entity does business and has equity. I'd like to borrow against that equity without using my personal assets to guarantee it. I've said it a billion times but I'll say it again. If I sink my farm, my personal assets aren't going to make a material difference in repaying the debt. I understand it is a risk but that's what they do. I'm merely trying to find an agreement that mitigates their risk to an acceptable level in which they're comfortable giving me an operating note.
The entity has value. It has the capacity to generate revenue. If I were a banker I would work to identify a loan agreement that mitigated the risk of excessive capital draws and loan up to an acceptable level of the equity in the entity. If it's that or the customer walk, I'd probably do the same whi in my bank is but I'd work for a solution.
Be interesting to hear how your 7:30 appt goes. Bet you'll be on your way out by 7:35 if you give your ultimatum right away.
Personally Guaranteeing Farm Loans
