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SE MN | You are right about using the Sch F vs accruals.
Bought first farm and local banker said July 1st balance sheet was good to get deal done. Then asked me for a 1/1 to do accruals with. Politely said I would dig one up and then called another lender... if they think they can get any good information by comparing. 1/1 to a 7/1 that’s where I get off the ride...
As has been stated, many similarities and many differences to the 80s. Still amusing how often I see people complaining that either the bank borrowed a guy too much money or that the bank doesn’t know anything and should have stuck with a guy for another year.
It is also absolutely amazing the amount of speculation there is about other peoples financial and management skills. Farmer Dave is absolutely sure that Farmer Bill inherited all his money and that he can’t possibly have done what he did without a rich uncle. When in reality Bill is just a better business man and producer than Dave.
As far as today goes, we have fixed rates, crop insurance, and government intervention on our side. And hopefully a lender that looks at a year end balance sheet, talks about working capital, and will speak up when they think something is going wrong. The future is bright. | |
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Thinking about ag economy
