Input Capital-Armegedon??

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Input Capital-Armegedon??

Mar 13, 2018 | 00:35 1 Hearing some very scary news about this Company and what they are doing to farmers. Still they continue to go to farm shows and sign new people up. With social media the way it is these days, how long before people speak up and word gets out that results in the shutdown of this business? What’s true? What is false? How’s the saying go? “A lie goes halfway around the World before the truth gets its shoes on?” Anybody know the truth as it could be helpful to others on this forum. Reply With Quote
farmaholic's Avatar Mar 13, 2018 | 05:58 2 Why even go there? If that is your last resort for credit it may be time to rethink what you're doing. Getting credit in exchange for security AND a reduced value for a commodity you grow...is that a recipe for success?

Lots of "suits" getting paid...

No one forces anyone to use their service.

Coming in on the other side of the argument, is it really Inputs fault the contract holder didn't/couldn't fulfill contract obligations? Banks and Credit Unions would probably do the same. Why couldn't the guys get credit from one of the easiest sources and whose mandate it is to lend to farmers-------FCC. Is it time to rethink this and lay blame where it should be? Reply With Quote
farmaholic's Avatar Mar 13, 2018 | 07:05 3 Maybe the banks let them go before they had to do the same thing? Maybe some loans were being called.

You have to wonder, up to what value do the institutions and Input lend? At these land prices and thinking it might be a bit toppy right now.... In the event of having to foreclose, how many of them want to own land at near the full market price now with the potential for a pull back or correction. Seems when a bank tries to sell foreclosed land..... no one wants to give the bank fair value.

The gig might be up soon, or at the very least you won't get as much borrowed against security. Reply With Quote
Mar 13, 2018 | 07:19 4 All Good points. You have to admit at the increase in land values have been fueled by low cost credit just as much as easy credit and this notion that Sask land was way undervalued....all true. But the heights that we have gone to in some areas....it is as you say a “bit toppy”. Any hiccup in lower grain prices (which some here already complain are too low) or back to back production problems, payments will be missed and the cycle will start again of more sellers than buyers. No fun being the lender/security holder then. The farmers that have started in the last 15 years haven’t seen that. My understanding is that Input has a lot of young farmers that have used their products.
Last edited by Crestliner; Mar 13, 2018 at 07:22.
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Mar 13, 2018 | 08:09 5 If you go with input capital ...do you ever see a premium for your canola?

So if you have guys accepting the lower values ...doesn't that put a lid on prices for a while? Reply With Quote
Mar 13, 2018 | 09:01 6
Quote Originally Posted by bucket View Post
If you go with input capital ...do you ever see a premium for your canola?

So if you have guys accepting the lower values ...doesn't that put a lid on prices for a while?
Does anyone know if Input Capital speculates on the streaming canola, or is it locked in at a known profit margin when a farmer signs up? Are futures even available far enough out for them to lock it in? Reply With Quote
helmsdale's Avatar Mar 13, 2018 | 09:23 7 Just perused their Twitter stream and not a single comment, good or bad on any of their posts...

Apparently they, "buy and sell canola, and so much more."

Never really looked into them, but from what I've heard the standard security agreement is canola + land? If a producer had equity to borrow against in land, why would you sign it up with these guys vs any other lender? Reply With Quote
Mar 13, 2018 | 09:25 8 Yes futures and options are used Reply With Quote
Mar 13, 2018 | 09:27 9 It sounds to me like this company is along the lines of the urban equivalent “Payday Loans”.

I would guess the end game is ownership of farmland? Reply With Quote
Mar 13, 2018 | 09:53 10 As many have already mentioned, one has to wonder why a farm would turn to this option unless they have no other financing alternatives. Unfortunately, if they had any equity in their farm, it will be less or eliminated now.

It is shark rates of interest and slim balls that con farms that don't understand what they are getting into. I wonder why someone contemplating this wouldn't ask an advisor and a good accountant if this is a good option.

But from the outside looking in, we think all these large farms are doing so well because all they see is shiny new equipment and 90,000 super duty trucks.

Sometimes I wonder what the truth really is. I am sure there are very wealthy farms that operate well but I fear so many are on the edge.

Companies like input capital will win at the end unless producers smarten up! Reply With Quote
fjlip's Avatar Mar 13, 2018 | 10:17 11 "But from the outside looking in, we think all these large farms are doing so well because all they see is shiny new equipment and 90,000 super duty trucks.

Sometimes I wonder what the truth really is. I am sure there are very wealthy farms that operate well but I fear so many are on the edge."

I am betting the largest Ritchie Auctions are mostly hung by DEBT. Millions in shiny iron, all accumulated too fast. Our tiny operation took 50 of my years and 30 more of parents and grandparents lives. Reply With Quote
Mar 14, 2018 | 09:39 12 I am betting the largest Ritchie Auctions are mostly hung by DEBT. Millions in shiny iron, all accumulated too fast. Our tiny operation took 50 of my years and 30 more of parents and grandparents lives.[/QUOTE]

I would agree to an extent Fjlip. Some might simply be cashing in before the high drops. Some won't have a succession option or health reasons.

Others yes, may be "hung with debt", poor management choices and maybe a bit of bad luck. I think one can make your own luck by making good decisions and a balance of risk and reward.

I feel very sorry for those involved with Input Capital, now they are stuck with a big bill to get out or 18% interest for 5-8 years Reply With Quote
Mar 14, 2018 | 10:17 13
Quote Originally Posted by Oliver88 View Post
It sounds to me like this company is along the lines of the urban equivalent “Payday Loans”.

I would guess the end game is ownership of farmland?
The RM map here showed a couple sections in Input Capital's name for a while, now that land is in Monette's name. Reply With Quote
blackpowder's Avatar Mar 14, 2018 | 10:27 14 Obviously a racket.
May I ask, who is Monette?? Reply With Quote
Mar 14, 2018 | 10:50 15 100000 acre farm based near swift current. Reply With Quote
blackpowder's Avatar Mar 14, 2018 | 11:06 16 Wonder where the buck stops in this scheme.
Interesting all the schemes to acquire land out there.
Eventually any land not owned by Hutts will someday be owned by Chinese or someone like it.
Oh well. Reply With Quote
farmaholic's Avatar Mar 16, 2018 | 21:11 17 Thursday March 15th...page 13.

If not subscribed check out the digital edition. Reply With Quote
Mar 16, 2018 | 21:56 18 You'll want to stay tuned to this one. Read that article very carefully and read between the lines. Its not over until the judge says its over. Reply With Quote
iceman's Avatar Mar 16, 2018 | 21:57 19
Quote Originally Posted by farmaholic View Post
Thursday March 15th...page 13.

If not subscribed check out the digital edition.
Not seeing anything.
Another clue please

Iceman Out Reply With Quote
farmaholic's Avatar Mar 16, 2018 | 21:59 20 Sorry Icy....I forgot to say it was in the Western Producer. My bad. Reply With Quote
Mar 16, 2018 | 22:49 21 He is screwed. Reply With Quote
iceman's Avatar Mar 16, 2018 | 23:17 22
Quote Originally Posted by mcfarms View Post
He is screwed.
Sounds like he has been for awhile. Reply With Quote
Mar 16, 2018 | 23:47 23 Copy that. Reply With Quote
Mar 17, 2018 | 09:39 24 Owing $3.3m interest on a $8m dollar debt started in 2014 tells you all you need to know about input capitals business plan. The balame is not all input captial though. Sounds like the operation was so severely stressed with slow grain shipment that they had no choice, and once you start pretty tough to walk back. The interest rates must be horrendous on missed payments. Even worse than scotiabanks %18 with cps...lol. Reply With Quote
Mar 17, 2018 | 09:54 25 I thought that 3.3 million interest on 8 million sounded excessive, but a quick calculation based on 3.5 years, and assuming the entire 8 million was the original capital, works out to just over 10% per year compounded.

It is probably worse than that, since the 8 million likely doesn't all date from 2014, but grew over the 3.5 years. But still not near payday loan rates. If one assumes they are lenders of last resort, and therefore taking on riskier loans, then getting at least double bank rates doesn't seem completely unreasonable.

But if they are secured by both land and grain, then the risk should be very low eventually, as compared to a payday loan.

Edit to add, that I negelcted to include grain already delivered under input capital's name, which is unknown to us. Assume that went to interest first, not principal, so the rate would be worse than 10%.
Last edited by AlbertaFarmer5; Mar 17, 2018 at 09:59.
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Mar 17, 2018 | 10:03 26
Quote Originally Posted by iceman View Post
Sounds like he has been for awhile.
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farmaholic's Avatar Mar 17, 2018 | 11:05 27
Quote Originally Posted by wiseguy View Post
Court rooms are full of Farmers in sask !
As Plaintiffs or Defendants? Reply With Quote
Mar 18, 2018 | 12:08 28
Quote Originally Posted by tmyrfield View Post
Owing $3.3m interest on a $8m dollar debt started in 2014 tells you all you need to know about input capitals business plan. The balame is not all input captial though. Sounds like the operation was so severely stressed with slow grain shipment that they had no choice, and once you start pretty tough to walk back. The interest rates must be horrendous on missed payments. Even worse than scotiabanks %18 with cps...lol.
TM, what a crock of shit, this is no reason to turn to loan sharks like input. One, if the farm would be mananged properly, maintain a strong balance sheet with cash reserves, slow deliveries wouldn’t put themselves into an immediate choice to turn to Input. Second, if they have the grain inventory and is a good operation, there is no bank that wouldn’t step in and help out in the interim.

There is way more to this story. I would sure like to know those details. I think its yet another too large a farm that way too deep in debt prior to getting in the paper over loan sharks Reply With Quote
Mar 18, 2018 | 12:19 29 I’ve been sleeping under a rock. Who u guys talking about? Reply With Quote
Mar 18, 2018 | 14:29 30 [QUOTE=Richard5;373791]TM, what a crock of shit, this is no reason to turn to loan sharks like input. One, if the farm would be mananged properly, maintain a strong balance sheet with cash reserves, slow deliveries wouldn’t put themselves into an immediate choice to turn to Input. Second, if they have the grain inventory and is a good operation, there is no bank that wouldn’t step in and help out in the interim.

There is way more to this story. I would sure like to know those details. I think its yet another too large a farm that way too deep in debt prior to getting in the paper over loan sharks[/QUOTE

Richard....Its pretty hard to dispute what you are saying.


Like payday loans, rent to own furniture dealers and used auto dealers with nobody turned down for a loan, there must be a demand for such services, evidence being is that they exist.

I totally agree with the premise that most financial institutions would do a major restructuring of debt using current and long term assets to secure a loan to make a farms payments more match asset life and farm cash flow requirements while maintaining operating capital.

input capital must require a farm to use the cash to clear off titles that can be used to secure the income stream. It occurs to me that the cash is usually insufficient to adequately increase the operating capital of the farm for more than a year or so. I think that this feature is part of input capitals business plan to acquire land.

In many cases I think farmers are great at what they do (production) but when trying to increase profits the easiest(most fun) route to take is expanding, but that is often not the best way. Bigger isn't better, better is better. One cannot usually grow your way out of a problem.

Input capital uses techniques in their advertising to appeal to farmers who want it all and want it now. Obviously it is working for them.

Entering a streaming deal with input capital is no different than any other deal imho dyodd! Reply With Quote