Some one smarter than me explain the BTO!

[Klause]

Good post, SF3.


A lot of people don't know how the FDMS and FSB operate and the rules behind them.



Pyramid scheme...

[SASKFARMER3]

That’s the only reason I posted the banks we’re not going to screw up again the next down turn and created a great system.

It all works in a up trend.

[sk_wheatking]

Banks review loans every year whether your incorporated or not. They can call your loans if you are a sole proprietor or an incorporated business. If you go into your review and it's not looking good or if they just don't like the outlook your done, incorporated or not.

[Richard5]

Also am I on with my assessment or off?

I have been portraying this for years, maybe not in this detail, but this exact thing on one of last weeks posts.

But i do not agree that its a poor accountant or lawyers fault for the increase in debt and constant reborrowing on land as it increases in value - this is all the result of the farmer not being good at managing a business. Many farmers are good managers and that is why they are successful. Outside looking in no one knows the truth (unless you pull PPSA reports off of ISC’s website)

Maybe S3 is successful, maybe he is a windbag and complainer. Regardless, his rants are always about something negative and he conveniently slides in a brag about ha situation.

[SASKFARMER3]

It’s showing what’s happening and I don’t believe that all farmers know what’s at risk Fcc or the banks won’t give corporations deals on a down turn.


But I do believe the banks learnt from the last down turn and are prepaired this time.

Am I not correct with that observation?

[farmaholic]

Lenders don't want your land when they can't recover the amount of money borrowed against it. And in some cases when Banks and FCC conduct a land sale on repossed land no one wants to pay them fair value....

Hard to sympathize with the lenders who extended too much credit. In essence they are even somewhat to blame for hyper inflated land values.

[brs]

I listened to some higher up people from fcc a few years ago,they had said if you are running into trouble just have to talk to us and we will do what we can to help. After the seminar I asked one of them if they r the reason land seems to be taking off in value. It seems to be no worries in how deep a person gets into just pay interest they said for a few years. Here in Saskatchewan one crop a year does not justify the value of land. When things take a turn for the worse and they will, look out the dollars invested to farm these days if ridiculous.

[sumdumguy]

If in fact FCC packages up and resells its loan accounts, why would FCC care if I make my payments?

[brs]

Looking like more a d more of a pyramid scheme, last one to the party gets left with the hot potato.

[SASKFARMER3]

Oh sumdumbguy they will care and if it happens credit drys up over night they pull back and then th shit hits the fan but what do I know I only seen it in the 80s and 90s but it can’t happen again. I’m just a dumb farmer what do I know let the good times roll.

Just explaining a scheme that’s in place am I right or wrong but it’s in place.

[farming101]

View incorporation with the objective of creating a stable business that can accommodate the next generation with little muss and fuss.

I agree, whether a sole proprietor or corporation when the gig is up, it's up.
If a good operator has 10 quarters clear there should be no need to go out and borrow 80% of its value.
In the game of farming that is bad business. The risk is too great.
Make the equity work for you, not bury you.

[SASKFARMER3]

I agree but what I’m trying to show us corps with personal guarantees your hooped. What. The shit hits the fan they will tell you into getting your wife to sign, you will because you can’t quit yet.

Also when head office sees a trend that’s not good for them they move people first sign.

[BreadWinner]

Just thinking about incorperating for tax reasons. Equipment in and land out, should save about $50000 a year in taxes. Is it worth incorporating or not?

[SASKFARMER3]

Yes it has a place but know what your signing with your bank. A personal guarantee and your hooped if the shit hits the fan.

But I would wait till Trudeau is done with us before you do so a bunch of things don’t have to be redone.

[Richard5]

Oh sumdumbguy they will care and if it happens credit drys up over night they pull back and then th shit hits the fan but what do I know I only seen it in the 80s and 90s but it can’t happen again. I’m just a dumb farmer what do I know let the good times roll.

Just explaining a scheme that’s in place am I right or wrong but it’s in place.

I agree with the scheme to an extent but i do not think its exactly the lenders intention to sink your business.

Input capital sole intention is!

How many people charge their inputs on the affiliated line of credits at their supplier? How many realize that CPS was charging 9.49% up until 3 years ago? How many don’t pay down some of the balance during the year, in the fall or at least prior to the Feb deadline?

Personally i would never let my business get to a point in which i need to charge more that 10-15% of the crop in the field. If you don’t have the right
working capital position - quit buying shit or at least use some land as security to fix the problem and don’t let it slip again.

As business people we need to be smart or smartter. Just as the orginal post describes, these are farm operators that are not always doing the right things and may fall into the scheme of bigger is better and the equipment dealer telling them “this is such a great deal”

I do agree that the next true crop failure there is a day of wrecking for many. I also believe that many are already there and no financial institution is ready to pull the pin yet.