tmrand - 4/26/2017 09:26

I just recently got a line of credit with my local bank. I have not needed one for 20+ years. I was amazed to learn that they do not loan money on expected future production. Crop Insurance and Government payments do not count as equity. They did want me to divulge that info for repayment ability concerns but would not use it in the ratios to back the line of credit. The only thing they would loan money on was machinery and land equity and (my loan officer) preferred machinery because they would not have to do an appraisal. They told me their bank went through this transition a couple of years ago and obviously had made very many customers upset. I do know that other banks will loan on future production but my hometown bank (10 or so mostly rural locations) will not. Obviously someone higher up could see problems on the horizon a couple of years back and were willing to lose customers in order to not be left holding the financial bag.