HomeMy WebLinkAboutThe Wingham Advance-Times, 1985-03-20, Page 860a - The Fw m Edition, Week of March 20, 1085
Thinly Ahead
10
Harvest Time!!
We have the
facilities for:
®receiving &
drying wheat
®we also buy &
dry barley.
®come in & see
our new
facilities &
plan ahead
Amberley
Grain Elevators
IDivision of Parrish & Heimbecker)
395-3300
Jct. Hwy. 86 & 21
VAR,
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• 17 HP Twin Kohler
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• Patented Foot Pedal
Hydrostatic
MARK'S GARAGE
Chepstow 366-2634
• Shaft Driven
Attachments
• Hydraulic Lift
• Tough Attachments
Balms.
Quality to Eliminate the Hard Work From Yard Work
Farm pressures here to stay
says Royal bank official ...
from page 5a
borrowing. The farm financial crisis in the
past several years is testimony to this.
It eases the effort of obtaining credit if you
are employing a level of farm financial
management, suggested Bearss.
Many fanners expeCially those over 40
years of age feel beleagured. They have dealt
faithfully with the Lucknow Cq-op, for
example, for years and now the Co-op
-- manager Dave Dawson 'wants' to know every-
thing about your operation right down to "the
Colour of your undetwear".
The kinds of questions asked by trade
creditors are serious the more money you
want to borrow, said Bearss. Questions asked
to make a credit decision indude the three Cs
of credit: Credibility and Collateral.
��
Lenders have moved away from using the
balance sheet, where equity was important,
to cash flow as••the basis for credit decisions,
said Bearss referring to the biggest reflection
of change in farm financing in this country.
Flom a lender's point of view, you have
priorities but your willingness to deal with the
guy is the comer stone of the relationship.
"No matter what his assets, if you cannot
trust the guy, you will no want to deal with
hum," Bearss stated.
Fanners at the seminar criticized the
bank's role in the 1982 interest rate crisis
which has created such hardship for fanners. "
They pointed out the banks made unpreced-
ented profits during that period, yet they
were not willing to take one cent less in
interest from financially hard pressed fann-
ers.
Bearss commented farmers think the banks
made their profits on the bads of farmers,
yet if all the money earned in profits during
the time period of 20 per cent plus interest
rates had been eliminated, it would have
reduced the overall prime rate by only one per
cent.
Bearss also observed that if the difference
between the average intent paid during that
period and the lowest interest rate if it had,
been in effect for that
period, makes the
difference between making or breaking your
operation, you were probably running ring the
operation on too tight a basis.
The fanners at the seminar objected saying
they were expected to take responsibility for°
making bad credit decision while the banks,
which also made poor credit edit decisions by
lending too much money to farmers incapable
of servicing the debt, were not expelled to
share the burden. Beams pointed out that if
farmers wanted to, change the rules in the
middle of the game, when they had good
years and made profits, the banks could then
come bade and expect additional interest
payments from the fanners, if banks were
expected to lower interest charges or realign
the debt when farmers were in a crisis due to
high interest.
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