In a recent issue of the
Corn & Soybean Digest, the changing environment for agricultural lenders was summarized at the 59th ABA National Agricultural Bankers Conference in Indianapolis, IN.
- Portfolio concentration
- Exposure to economic shock under various scenarios
- Evidence of profit, liquidity, working capital, and collateral
- Break-even analysis and owner draws
- Accrual adjustments to tax records
Sounds a lot like the
Four C's of Credit. Of course, the ultimate back-stop is the Fifth "C" of Credit, which might involve engaging a Competent appraiser, the Sixth "C" of credit.
- Character
- Capacity
- Capital
- Conditions
- Collateral
- Competent Appraiser (Geography, market, and intended use are possible factors for consideration.)
Some topics are probably good for one's entire career in business.
Ciao!