Question: Why do firms or individuals involved in farming need to
Why do firms or individuals involved in farming need to borrow? What type of inventory does a farmer need?
Answer to relevant QuestionsWhat type of receivables does a farmer typically have? What collateral is typically available? In addition to general economic conditions, what should a banker be watchful of before extending credit to a farmer? Describe what a ‘qualified mortgage’ is and explain the elements of the ability to repay rule. Explain how a company’s permanent working capital needs differ from its seasonal working capital needs. Explain why collateral alone does not justify extending credit. Cite examples, using real estate or agricultural products as collateral. The differential between fixed- rate credit card rates and a bank’s cost of funds typically varies over the interest rate cycle. What is this relationship, and why does it exist? Does the differential between commercial ...
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