Milk Price- Please read Mod note in post #1

kevthegaff

kowtow wrote: »

General rule is to try and match finance to the life of an asset, if finance required. On the other hand some seasonal costs would be well served by overdraft or perhaps even stocking loan... as you say depends on the farm.

My concern is the apparent willingness to 'confuse' ability to borrow with actual income... being able to borrow money doesn't eliminate a loss, never has never will, and yet from promissory notes to delayed superlevy the way institutions talk here you'd think the two were interchangeable.

So match repayments to the life of an asset or to how long before one upgrades??

Deepsouthwest

Farmer Ed wrote: »

There is some EU funding for new investment available from the main banks at 4.5% at the moment. The funny thing is if you go in and tell them you want to go and buy a new Audi, you might have a good chance of getting the money at that rate, so long as you tell them you will use the Audi for business purposes. However if you go in and tell them you want some money because you want to pay of a bill and the local contractor or the feed merchant needs to be paid. You're unlikely to get the money and if you do you'll be charged a lot more than 5%
So in effect money is only available for things you don't really need in the first place. So in a way I agree with Kowtow. Maybe farmers may be better of in the long run if they didn't get it.

While I'm a big fan of Audi, why would u need a 4.5% loan? Aren't VW advertising 0% finance deals now!!

Timmaay

Deepsouthwest wrote: »

While I'm a big fan of Audi, why would u need a 4.5% loan? Aren't VW advertising 0% finance deals now!!

Ah please, ya surely know 0% finance is just pulling the wool over your eyes, you pay the rrp against a cash price of a grand or so less!

Plus blowing 40/50k on a car, jezz like ha! I'd pick my trusty '01 s3 anyday over a fairly bland a4 diesel ha.

Farmer Ed

kevthegaff wrote: »

Think it was me about the skidsteer!(one for under 7k) I've never borrowed for a machine just yet.. but if you have money in the bank for merchants, bills etc would u not be better off with finance and having surplus in account for bills?

I guess the point I was making is that banks have different rates of interest for different types of borrowing. For example if someone asks for a loan to buy a new car and they say its for business purposes they will qualify for this 4.5% loan. Yet they are being charged 6.5% on most other farm loans and more if they have an overdraft. The banks are able to get free money at the moment so in effect we are now paying for the mistakes they made in the past.

The man I buy the straw from every year told me he has a couple of customers that have every kind of a new machine in the yard, but cant pay him for straw and beet he sold them. I drove a two hour round trip today to collect money from a someone who owes me money. Needless to say I didn't get paid. I am pretty sure that person will be good for the money in the long run. But the banks should be the ones supplying credit not me.

The crazy thing about it is that I'm pretty sure that person would qualify for the 4.5% loan if they were to buy a new car, but they wouldn't get any kind of overdraft to pay me, or if they did they'd be charged through the nose for it . I know they are just having a bit of a cashflow problem and they will pay me in the long term. Why can't the banks see that? The banks are not supporting small business the way they should be. Why the growth in things like crowd funding with interest of up to 10% or more, if the banks are as supportive of small business as people would like to believe.

Farmer Ed

Deepsouthwest wrote: »

While I'm a big fan of Audi, why would u need a 4.5% loan? Aren't VW advertising 0% finance deals now!!

Personally I have a theory about Audi drivers.

Best kept to myself

Deepsouthwest

Farmer Ed wrote: »

Personally I have a theory about Audi drivers.

Best kept to myself

I hope it's positive, my previous three cars to the present one were Audi's!

Farmer Ed

Deepsouthwest wrote: »

I hope it's positive, my previous three cars to the present one were Audi's!

Let's say his theory of mine is developing as we speak

Only a matter of time before someone does a phd on it;)

frazzledhome

Farmer Ed wrote: »

I guess the point I was making is that banks have different rates of interest for different types of borrowing. For example if someone asks for a loan to buy a new car and they say its for business purposes they will qualify for this 4.5% loan. Yet they are being charged 6.5% on most other farm loans and more if they have an overdraft. The banks are able to get free money at the moment so in effect we are now paying for the mistakes they made in the past.

The man I buy the straw from every year told me he has a couple of customers that have every kind of a new machine in the yard, but cant pay him for straw and beet he sold them. I drove a two hour round trip today to collect money from a someone who owes me money. Needless to say I didn't get paid. I am pretty sure that person will be good for the money in the long run. But the banks should be the ones supplying credit not me.

The crazy thing about it is that I'm pretty sure that person would qualify for the 4.5% loan if they were to buy a new car, but they wouldn't get any kind of overdraft to pay me, or if they did they'd be charged through the nose for it . I know they are just having a bit of a cashflow problem and they will pay me in the long term. Why can't the banks see that? The banks are not supporting small business the way they should be. Why the growth in things like crowd funding with interest of up to 10% or more, if the banks are as supportive of small business as people would like to believe.

So to be clear, what you're saying is

Banks should give unsecured money to your debtor so he can pay you.

No question as to why he has himself in this cash bind

No question as to why he bought goods/service without agreeing terms with you

On your estimation he'd get finance on a machine/car. A secured loan where assets are easily recoverable

If I'm understanding you, do you not see the problem?

WheatenBriar

frazzledhome wrote: »

If I'm understanding you, do you not see the problem?

He probably see's the problem but not the flexibility
They should give his customer the facility secured
I mean banks got bailed out for their mistakes yet kept a lot of the loan book that the bailout paid for,and continue to earn money from it
Not too many businesses can get away with that
Jam on both sides of the bread basically

frazzledhome

WheatenBriar wrote: »

He probably see's the problem but not the flexibility
They should give his customer the facility secured
I mean banks got bailed out for their mistakes yet kept a lot of the loan book that the bailout paid for,and continue to earn money from it
Not too many businesses can get away with that
Jam on both sides of the bread basically

I agree but doubt that's what's been got at here. Perhaps I'm wrong. Trying to decipher can be difficult at times.

frazzledhome

WheatenBriar wrote: »

He probably see's the problem but not the flexibility
They should give his customer the facility secured
I mean banks got bailed out for their mistakes yet kept a lot of the loan book that the bailout paid for,and continue to earn money from it
Not too many businesses can get away with that
Jam on both sides of the bread basically

There are also badly run business'. I had to sub a guy this time last year to pay his insurance. It was repaid in 30 days, but this guy didn't know that this could be financed over 11 mths. The same guy owes a massive bill to coop and bitches about having to pay interest. He has done a big cap ex recently out of (you guessed) cash flow. We know he isn't alone.

Some people just go blindly head down ass up until they bang into something.

mf240

Deepsouthwest wrote: »

While I'm a big fan of Audi, why would u need a 4.5% loan? Aren't VW advertising 0% finance deals now!!

You'd buy a good vento or carina with test for 5/600 hundred.

Was a local enough lad used change up the car every couple of years. used have to change contractors nearly as often. All flash but no cash.

Farmer Ed

frazzledhome wrote: »

So to be clear, what you're saying is

Banks should give unsecured money to your debtor so he can pay you.

No question as to why he has himself in this cash bind

No question as to why he bought goods/service without agreeing terms with you

On your estimation he'd get finance on a machine/car. A secured loan where assets are easily recoverable

If I'm understanding you, do you not see the problem?

In the case of farmers if the bank has a charge on the property then all the debts are infact secured. As far as I know this new 4.5% loan would fall into that category also. Just because you pay 8% on an overdraft does not necessarily mean it is unsecured debt.
The person who owes me money is infact making a great go at getting a business up and running and is employing 4 people in the process. In real life not every business is flush with cash at all times.I am sure if it came to it they wouldn't have a problem using business assets as security.
Security is not the issue. I think a lot of the problem is the banks no longer have people in the branches with the discretion to make decisions on lending.

Farmer Ed

frazzledhome wrote: »

I agree but doubt that's what's been got at here. Perhaps I'm wrong. Trying to decipher can be difficult at times.

If I understand you correctly it sounds like if this guy was to go to the bank and they were to agree to restructure his borrowing so he could pay off everything he owes to the Co Op and also fund his latest capital investment, it should go a long way to sorting out his problems. This brings us back to my original point.
The problem is would the bank have cop on enough to back him?

frazzledhome

Farmer Ed wrote: »

If I understand you correctly it sounds like if this guy was to go to the bank and they were to agree to restructure his borrowing so he could pay off everything he owes to the Co Op and also fund his latest capital investment, it should go a long way to sorting out his problems. This brings us back to my original point.
The problem is would the bank have cop on enough to back him?

Not a phuckin hope. That bridge is long burned.

In fact the big bad coop/Plc are the only ones standing by him. They have bent over backwards to do so. Not what you want to hear but true

kevthegaff

Farmer Ed wrote: »

I think a lot of the problem is the banks no longer have people in the branches with the discretion to make decisions on lending.

In theory sounds plausible but in reality reckless lending may happen

kevthegaff

frazzledhome wrote: »

Not a phuckin hope. That bridge is long burned.

In fact the big bad coop/Plc are the only ones standing by him. They have bent over backwards to do so. Not what you want to hear but true

We give out about the Co ops, but the do have to deal with big debts built up and the outcry if the Co op is too heavy handed. Some of these farmers would act the same way in any business

kowtow

kevthegaff wrote:

In theory sounds plausible but in reality reckless lending may happen

Some does.

But it was at least lending in the branch was scattergun reckless. It had the inherent stability of the random mind.

Lending by a central computer however.... that will lend and lend as long as every cow is a high ebi jersey x who eats no meal and every house built is an apartment...

We know what happens then.

mf240

kevthegaff wrote: »

We give out about the Co ops, but the do have to deal with big debts built up and the outcry if the Co op is too heavy handed. Some of these farmers would act the same way in any business

Local lad has done all the independent merchants and is now only able to deal with Co op. In all fairness a lad like that would have to be kept on a tight leash,


Priced fertiliser in Glanbia and they seem to be very competitive on price and haven't built the 7 euro rebate into it in fairness.

mf240

kowtow wrote: »

Some does.

But it was at least lending in the branch was scattergun reckless. It had the inherent stability of the random mind.

Lending by a central computer however.... that will lend and lend as long as every cow is a high ebi jersey x who eats no meal and every house built is an apartment...

We know what happens then.

You confused. You not expected to build apartments for the jerseys.

Farmer Ed

kevthegaff wrote: »

We give out about the Co ops, but the do have to deal with big debts built up and the outcry if the Co op is too heavy handed. Some of these farmers would act the same way in any business

To a point you are correct. but if you supply milk surely the co op should always get their money and at 16% Apr they can't really lose

Buford T. Justice XIX

kevthegaff wrote: »

In theory sounds plausible but in reality reckless lending may happen

I was in with my bank manager relationship adviser with my accounts a while back and he said that the managers have discretion to grant loans up to 30k by themselves and they may have further increased levels again soon.

whelan2

Buford T. Justice V wrote: »

I was in with my bank manager relationship adviser with my accounts a while back and he said that the managers have discretion to grant loans up to 30k by themselves and they may have further increased levels again soon.

mustnt be ulster. Had to go credit department to get a 5k overdraft here. Took over a week. Ya wouldnt want to be in rush for it. Even though my debt level is very low

WheatenBriar

whelan2 wrote: »

mustnt be ulster. Had to go credit department to get a 5k overdraft here. Took over a week. Ya wouldnt want to be in rush for it. Even though my debt level is very low

No it wouldn't be Ulster
BoI have aiui a 40 k discretion but only acount managers managing customers over 1million in borrowings
BoI can and do same day approvals up to 40k if you have the paperwork sorted, payment capacity, good record with them etc if you get me?
Some banks are quicker and better than others but all need you to makea winnable case

kowtow

mf240 wrote: »

You confused. You not expected to build apartments for the jerseys.

If you think that you haven't seen the draft of Harvest 2040.

Sam Kade

China bought 51% more milk in January hopefully they continue the trend.

atlantic mist

china are waiting for our (eu market) product they stocked up last year and im sure will do the same this year, after the health scares in oceanic product we have the premium market con tray to what our processors are telling us on this international market.

some differences on loan sanctions from bank managers, branch manager in our case can sanction 80k anything above must go get clearance from agri bank manager and relationship manager, moved to boi last march think im on my third relation ship manager at this stage id say its some laugh the musical chairs they play in the bank, gone are the days where you have one contact or even a branch manager for more than 2 years

considering banks try and collect payments when sfp comes in or by milk cheque it is probably one of the most secure lending situations they face, secured secondly by land, very hard for they to loose thats why they lending rates are not justifiable and this EU funding is badly needed, the interest is criminal when you look at it

WheatenBriar

BoI branch managers cannot sanction 80k without going to group credit who do the approval
Aib are similar

Dawggone

frazzledhome wrote: »

In fact the big bad coop/Plc are the only ones standing by him. They have bent over backwards to do so. Not what you want to hear but true

The businessmen that can differentiate between finance and merchant credit, never, ever use the latter.

I've posted on here before that it's a kinda Irish thing...not only in farming either. Anyone ever do business with the large retail multiples? On paper they guarantee 30days for payment, that quickly turns into 90days and before you know it, 180.
The government are just as bad at payment, unless it's wages or dole of course.
Ye all talk of budgeting, or is that just for grass?

Buford T. Justice XIX

Gdt up by 1.4%. No link yet.