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NW IL | When the interest owed is greater than the net profit...?
When the operation can't cashflow anymore?
What some are missing here is that the bank is probably using crop insurance guarentees for collateral. Even so, a bank generally doesn't lend if the debt to asset ratio gets too out of wack or there is no clear net possitive cashflow forecast to be able to repay loans.
Zero net worth or 1mill net worth, you still need to show proof of being able to pay back the loan eventually, or your access to credit will be cut off and you'll be forced to liquidate or declare bankrupcy. | |
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Interest on operating debt
