'Banking Crisis'

Muckit

Is it just me or are AIB and BOI aggressively advertising farm loans atm?

TV ads, back page of the indo....

Will the bankers be as unscrupulous as they were with drumming up new mortgage business or will it be only those with good business plans that will be considered/approved.

Is lrish agriculture the new property bubble???

I said

Those fcuking ads are bad enough and now ya have that one for been brave for getting up at six in the morning going round my head.
I get up at five for work am I extra brave according to that ads logic so?

_Brian

Muckit wrote: »

Is it just me or are AIB and BOI aggressively advertising farm loans atm?

TV ads, back page of the indo....

Will the bankers be as unscrupulous as they were with drumming up new mortgage business or will it be only those with good business plans that will be considered/approved.

Is lrish agriculture the new property bubble???

Sister works in a bank and deals with farm loans.. They've been told to lash out the money as long as they get large deeds into the safe against the loans. I've quizzed her on the details of the business plans and they are thin to say the best... half million handed out to a farmer who's 5 year business plan had milk at near 40c/litre right out to five years.

rangler1

_Brian wrote: »

Sister works in a bank and deals with farm loans.. They've been told to lash out the money as long as they get large deeds into the safe against the loans. I've quizzed her on the details of the business plans and they are thin to say the best... half million handed out to a farmer who's 5 year business plan had milk at near 40c/litre right out to five years.

They still can't figure out whether it was irresponsible borrowing or irresponsible lending that caused the last crisis

Connemara Farmer

rangler1 wrote: »

They still can't figure out whether it was irresponsible borrowing or irresponsible lending that caused the last crisis

Both. Plus SFA regulation, plus, plus plus......... But the short answer is both.

Know people locally, nice hard working people, who took out astronomical loans on very ordinary wages. I always think it's like lads on motorbikes you meet on the road doing silly speed, tis all grand until tisn't. Then it's too late.

Reggie.

I said wrote: »

Those fcuking ads are bad enough and now ya have that one for been brave for getting up at six in the morning going round my head.
I get up at five for work am I extra brave according to that ads logic so?

Yes you are

Muckit

I can just see a lot of enthusiastic and inexperienced (in money matters) young lads being sucked in by it all. I hope I'm wrong.

I was talking with friends about the whole madness of the property boom and the doling out of 'free money' for big mortgages that went on. One of my friends used to get phonecalls every second day at one stage to up his mortgage application amount. Absolute bullying and skullduggery.

Twud be very wrong if this sort of crack were to happen with young farmers only starting out.

Dawggone

I've a good friend fairly high up on the lending side of things with BoI and he said that they are "shoveling" out money to dairy farmers. Not to any other sector though.

I said

Reggie. wrote: »

Yes you are

Thanks bud I'll have a lie on in the morning

frazzledhome

Dawggone wrote: »

I've a good friend fairly high up on the lending side of things with BoI and he said that they are "shoveling" out money to dairy farmers. Not to any other sector though.

Report, can't confirm. They were present at a local mart recently peddling for new startup dairy business. Could this be true?

If so I'm outa here, we're phucked

whelan2

well ulster bank are definitely not shovelling money at dairy farmers

trixi2011

frazzledhome wrote: »

Report, can't confirm. They were present at a local mart recently peddling for new startup dairy business. Could this be true?

If so I'm outa here, we're phucked

Had a few brief meetings during the summer to see what I might be able to get if I was to find an opportunity and they weren't going to shovel money at me without land deeds.

onyerbikepat

I was going to say something smart about a new industrial power washer, but i wont.:D

Dawggone

frazzledhome wrote: »

Report, can't confirm. They were present at a local mart recently peddling for new startup dairy business. Could this be true?

If so I'm outa here, we're phucked

Friend (banker) reckons that land has been stress tested @ €7k/acre over the last few years.
Another bubble begins......

onyerbikepat

They should merge this thread with the 'Quotas' one.

kowtow

Dawggone wrote: »

Friend (banker) reckons that land has been stress tested @ €7k/acre over the last few years.
Another bubble begins......

From a bankers perspective €7K / acre makes perfect sense in today's climate, reflects a milk price of about €0.25-€0.30.

So for once at least it seems Irish banks aren't being delusional about the underlying asset.

On the other hand their attitude to farm lending is a bit distasteful - one told me the other day that they loved lending (secured) to farmers because they knew how much the farmer hated to lose "the family land".

The answer seems to be, walk in with the deeds and tell them to fill in the business plan themselves.

Greengrass1

Pleasd sir can I have some more?
If anyone gets a loan after saying they will get a milk price of 40c needs all the luck they can get

onyerbikepat

Roughly how much are they willing to lend against the deeds of a parcel of land?

kowtow

onyerbikepat wrote: »

Roughly how much are they willing to lend against the deeds of a parcel of land?

Have no interest in borrowing but if their internal land price forecast is €7K they will want to remain over-covered so I doubt they would be keen to go too much above €5K for each acre offered as security (including additional charges etc.)

onyerbikepat

kowtow wrote: »

Have no interest in borrowing but if their internal land price forecast is €7K they will want to remain over-covered so I doubt they would be keen to go too much above €5K for each acre offered as security (including additional charges etc.)

God, that's tame considering how they were throwing money at people, with feck all collateral, during the boom years.

Mad4simmental

Not sure if it's just dairy.
14 span double sided slatted shed going up near me with a sliding roof so the meal truck can tip the load of meal into it. It's fcuken crazy most lads wet dream of a shed. He's a beef farmer.

I really hope lads don't go to mad, it will be a sad place if the banks get trigger happy and start pulling farms off lads.

I'd rather milk 30 cows & own everything than milk 300 and be upto my tits in debth.

Coonagh

Mad4simmental wrote: »

Not sure if it's just dairy.
14 span double sided slatted shed going up near me with a sliding roof so the meal truck can tip the load of meal into it. It's fcuken crazy most lads wet dream of a shed. He's a beef farmer.

I really hope lads don't go to mad, it will be a sad place if the banks get trigger happy and start pulling farms off lads.

I'd rather milk 30 cows & own everything than milk 300 and be upto my tits in debth.

That kind of a shed would be pure madness for any farming enterprise dairy, tillage of beef

caseman

The yanks recon you have'nt made it unless you go bankrupt at least once.

kevthegaff

Coonagh wrote: »

That kind of a shed would be pure madness for any farming enterprise dairy, tillage of beef

ah but the sliding roof ted!

keep going

They have no set figure for the price of land , its up to you to decide that but they are looking for serious cover on assets-min 30% but it also varies according to your circumstances. The comment about looking for alot of deeds definitely stacks up

mahoney_j

Don't be scared of debt lads,very little of us can survive without it.a lot of what I've read here is all what Johnny next door is building or heresay about others.some lads would soil themselves with debt of 1.5 k per cow whilst others will work their holes off at 4 or 5k per cow and plough on out the other side

Coonagh

There is very little evidence of the banks throwing out money the way it's been spoken about here.

Some of the stuff been quoted here sounds like a game of Chinese whispers.

Reggie.

Mad4simmental wrote: »

Not sure if it's just dairy.
14 span double sided slatted shed going up near me with a sliding roof so the meal truck can tip the load of meal into it. It's fcuken crazy most lads wet dream of a shed. He's a beef farmer.

I really hope lads don't go to mad, it will be a sad place if the banks get trigger happy and start pulling farms off lads.

I'd rather milk 30 cows & own everything than milk 300 and be upto my tits in debth.

Now your talking

grazeaway

Think there will be some naive people will get stung. Land is still a valuable asset and while it is expensive compared to other countries valuing it at €7k/acre now allows it to retain good value for them. If it all goes tits up they can squeeze the owner and still get a nice return on selling it.

I remember the folks telling me about getting called into the bank back in the 80's to update some "routine paperwork". While smoozing them with some lark about financial planning for the future (turned out to be one of those ansbacker account things but they didn't have the spare cash) the manger casually passed my dad a piece of paper for him to sign as they wanted to update their records. Just as he was about to sign my mum had a quick look and realised that it was a form to sign over the deeds. The bank had discovered that the farm wasn't used as security when they upgraded the house and basically wanted it.

I would advice anyone taking out a loan on the farm to get their numbers nailed right down to the last. For the dairy boys pick a base line on the worst case senario then knock 10% off it. In a lucky position in that I have cleared all the loans.

dimcoin

rangler1 wrote:

They still can't figure out whether it was irresponsible borrowing or irresponsible lending that caused the last crisis

I am sure that it is known, but wht would a company admit to mismanagement? Might make it harder to get bailout money next crisis.

Miname

mahoney_j wrote: »

Don't be scared of debt lads,very little of us can survive without it.a lot of what I've read here is all what Johnny next door is building or heresay about others.some lads would soil themselves with debt of 1.5 k per cow whilst others will work their holes off at 4 or 5k per cow and plough on out the other side

but how much is enough? if a lad can lead a happy life content and able to provide without burying himself in debt is it not a better scenario. Ive been looking around lately and bursting my boll1x and starting to wonder if im wrong. i enjoy challenges and dont think realistically i'll ever be completly debt free, but im seeing alot of lads getting on without the headaches. i suppose its a matter of how you get yur enjoyment but i think too many people bury themselves in debt just because they can.

mahoney_j

Miname wrote: »

but how much is enough? if a lad can lead a happy life content and able to provide without burying himself in debt is it not a better scenario. Ive been looking around lately and bursting my boll1x and starting to wonder if im wrong. i enjoy challenges and dont think realistically i'll ever be completly debt free, but im seeing alot of lads getting on without the headaches. i suppose its a matter of how you get yur enjoyment but i think too many people bury themselves in debt just because they can.

If a lad is happy as he is then let him stay as he is.im relatively young and happy to build my little empire with manageable debt for the foreseeable future

Miname

mahoney_j wrote: »

If a lad is happy as he is then let him stay as he is.im relatively young and happy to build my little empire with manageable debt for the foreseeable future

The problem is the word manageable, ive been through completly unforeseen problems within another business which just seemed to be too unbelievable to even consider, robbed twice, freak flood that destroyed tens of thousands worth of machinery and the same in work in progress, the costs of preventing this ever ocurring again (thankfully they have never been used) the repair costs and then a personal accident and a huge number of bad debts all in the one whack. This then leading to working ridiculous hours altogether led to blacking out and run upon run of tests in hospitals. during those times managable wasnt even in my vocabulary, im glad to say im out the other side of it but i never want to see it again im in no way risk averse but il be far more cautious moving forward with a better realisation that maybe theres other things i could be at.

Muckit

mahoney_j wrote: »

If a lad is happy as he is then let him stay as he is.im relatively young and happy to build my little empire with manageable debt for the foreseeable future

Now you said it. Manageable. There's nothing wrong with debt in itself. Sure the majority of ordinary working people in the country have mortgages. It's when one or both of the incomes goes or other unplanned expenses creep in that things start getting hairy.

Borrowing a couple of thousand a dairy cow with a structured plan in place. .. grand. Borrowing €500/suckler cow could be crazy. It's all relative to repayment capacity.

onyerbikepat

Another thing to remember too, despite what people may say about banks, they really do not want to move in on your assets. Banks like all big organisations really value their image. They spend small fortunes on advertising, public relations, so moving in and selling the family farm is the last thing they want. If you do qualify for a loan, chances are you will be able to pay it off comfortably. It will be more a case of when rather than if.

A cow called Daisy

[QUOTE=Mad4simmental;92406090
I really hope lads don't go to mad, it will be a sad place if the banks get trigger happy and start pulling farms off lads.

I'd rather milk 30 cows & own everything than milk 300 and be upto my tits in debth.[/QUOTE]

I think for some peoople borrowing money becomes an addiction of sorts. As soon aa one loan is cleared they buy or build something with the age old excuse of 'I'd rather give money to them than to the taxman'
Don't seem to matter whether they neeed it or not.

Have had big borrowings relative to stock numbers and farm size myself and can have a detrimental effect on your health when things go wrong

Miname

onyerbikepat wrote: »

Another thing to remember too, despite what people may say about banks, they really do not want to move in on your assets. Banks like all big organisations really value their image. They spend small fortunes on advertising, public relations, so moving in and selling the family farm is the last thing they want. If you do qualify for a loan, chances are you will be able to pay it off comfortably. It will be more a case of when rather than if.

what you say about the image is true, but it was once a big deal in an area if someone went burst, its now commonplace and the whole sympathy for losses due to debt are soon also going to be a thing of the past, everyone keeps preaching about family farms and such, the average joe doesnt give a monkeys theyll just say they borrowed it and they have had it taken back. as for the banks handing out money to people who qualify for loans, ive been offered and even told they will adjust the books and numbers on borrowings that even in my limited knowledge knew were unworkable. A prime example being one time the manager told me to draw down a serious loan on something that was only in the pipeline, when i asked what would i do if it didnt materialise, i was told "i'm sure you'll find something to use it for". luckily i neither drew it down or did the project materialise. My wife works in the banking sector and even she will tell, how the lads or lassies with the most people tied up with either debt or mis-sold insurance policies are the ones who keep getting moved up. Its handy for a manager to tell you it'll be grand but it will be you who has to deal with the fall-out.

amacca

Muckit wrote: »

I can just see a lot of enthusiastic and inexperienced (in money matters) young lads being sucked in by it all. I hope I'm wrong.

Thats why the system should step in and not allow them get the cash unless they have a feasible/sound business plan

that mixture of enthusiasm + inexperience tends to have negative consequences for others along with those lads long term…if it was just them i could probably live with it, when they drag everyone else down, then I have a problem…but you can't blame them, the system is wrong particularly the way those who work in lending are incentivised if the lash it out post is true (its all short term targets to boost share price and keep the board happy with no real long term plan…scarily it seems like they are trying to start the merrygoround again in the hope they can get off it before it spins so fast everyone ends up feeling nauseous

+imo you can't expect morons to behave rationally/sensibly and you can't really blame morons for being morons - the bank should have more in place than get deeds in if it all goes pear shaped, who needs to deal with multiple plots being auctioned off to big business or vulture funds etc in the future so those that worked it for generations can be squeezed out.

I hope its not an agri re-run/equivalent of credit union loan providing the "saved deposit" for a "110% mortgage ted" and then the couple taking further loan only this time on a credit card for furnishing the entire house with all the latest mod cons on the equivalent of a job in Spar with all the job security that goes with that

I really hope people see you're nothing more than a slave if you have a big loan hanging over you and choose instead to live within their means like countless others before them had to if our financial institutions insist on acting like greedy headless chickens again - if that lash it out post is correct it looks like very little was learned…………except that when it does go all pear shaped the banks will have some collateral for their money rather than seamy fitz/ fingers fingleton good buddys word, but if its widespread enough that won't be sufficient to save them from needing a bailout or going to the wall again

_Brian

Coonagh wrote: »

There is very little evidence of the banks throwing out money the way it's been spoken about here.

Some of the stuff been quoted here sounds like a game of Chinese whispers.

Well all I can say is the sister rang me last week asking about how long a herd number takes from applying as the bank were holding back a loan until his number came through.. This was a €600k+ parcel of land, being bought to rent out as an investment and the guy has a wad of cash going into the purchase. She is currently working on 3 more loans in excess of €200k, all of these for new dairy entrants.

blue5000

http://www.irishexaminer.com/farming/the-farmer-and-the-fraudster-289010.html
Sober reading here.

Coonagh

_Brian wrote: »

Well all I can say is the sister rang me last week asking about how long a herd number takes from applying as the bank were holding back a loan until his number came through.. This was a €600k+ parcel of land, being bought to rent out as an investment and the guy has a wad of cash going into the purchase. She is currently working on 3 more loans in excess of €200k, all of these for new dairy entrants.

200K is not excessive for a new entrant and depending on the amount if cows they intend milking is actually well manageable.

Now trying to say that the bank are sanctioning loans based on a five year business plan with an average milk price of 40 cents is complete tripe. AIB will only entertain plans using an average price of 30 cents and will only part finance land purchase and even after that are reluctant to do so.

Sam Kade

_Brian wrote: »

Sister works in a bank and deals with farm loans.. They've been told to lash out the money as long as they get large deeds into the safe against the loans. I've quizzed her on the details of the business plans and they are thin to say the best... half million handed out to a farmer who's 5 year business plan had milk at near 40c/litre right out to five years.

What bank was that? Not AIB anyway Most banks use 28c/liter and 22c/litre production costs.

Coonagh

blue5000 wrote: »

http://www.irishexaminer.com/farming/the-farmer-and-the-fraudster-289010.html
Sober reading here.

Jesus I feel sorry for that man but what in the name of god was he doing taking out a loan with a 26% interest rate.

mf240

Parasites. But sometimes necessary.

blue5000

Coonagh wrote: »

Jesus I feel sorry for that man but what in the name of god was he doing taking out a loan with a 26% interest rate.

Sub prime lending.

lefthooker

Bollox to banks shovelling out money, they want one of your kidneys in return.
Currently they will look for deeds or "First Legal Charge" if your total exposure exceeds 65k. I know cos I went looking for a loan lately. It would bring my total borrowings since I started expanding to 1200/cow. No issues regarding repayment capacity but since it would take me over their threshhold they'd need deeds. I'm not against handing over deeds but I think it'd want to reflect the amount to be borrowed and not just automatic if you pass 65k. I had ¾ of the amount on deposit but they'll only take a lean on savings if you've got the full exposure on deposit and if you had that much why would you want the loan. The worst part of it for me is having to pay both solicitors fees which could amount to c. €3-4k. That's real dead money in my books.

Sam Kade

lefthooker wrote: »

Bollox to banks shovelling out money, they want one of your kidneys in return.
Currently they will look for deeds or "First Legal Charge" if your total exposure exceeds 65k. I know cos I went looking for a loan lately. It would bring my total borrowings since I started expanding to 1200/cow. No issues regarding repayment capacity but since it would take me over their threshhold they'd need deeds. I'm not against handing over deeds but I think it'd want to reflect the amount to be borrowed and not just automatic if you pass 65k. I had ¾ of the amount on deposit but they'll only take a lean on savings if you've got the full exposure on deposit and if you had that much why would you want the loan. The worst part of it for me is having to pay both solicitors fees which could amount to c. €3-4k. That's real dead money in my books.

I halved a bank loan because of that, what happened to just handing over the deeds like before?

lefthooker

Sam Kade wrote: »

I halved a bank loan because of that, what happened to just handing over the deeds like before?

I've cancelled the loan over that.
If they're hiring a solicitor they should pay his/her fees cos they're working for them. I challenged the bank over the fees at the Ploughing. "Sure, sure, sure, legislation,blah, blah, blah" was the response and I would have left without ****ing him into the heavens till he asked would I have any interest in a mortgage:mad::mad::mad:

So I went to the tent of the other bank and they'll give me a loan of upto 64k unsecured if I display repayment capacity. Meeting scheduled this week

kowtow

lefthooker wrote: »

I've cancelled the loan over that.
If they're hiring a solicitor they should pay his/her fees cos they're working for them. I challenged the bank over the fees at the Ploughing. "Sure, sure, sure, legislation,blah, blah, blah"

The change in legislation is that your solicitor used to act *for them* as well as for you in mortgage / charge business.

Now they are not allowed to, so both sides pay. Do remember to ask them for a copy of the bill from their Solicitor though, if you are being asked to pay it.

One of the oddities of the political history of Ireland in the 19th century is that rural - rather than urban - Ireland has had compulsory registered / short form title for a very long time, much longer than the UK for example. Executing or registering a charge is therefore a very quick process and anybody who pays or is willing to be charged thousands for doing so needs their heads examining!

td5man

whelan2 wrote: »

well ulster bank are definitely not shovelling money at dairy farmers

AIB are if your BRAVE ;-)???😀😊ðŸ˜; -)

Reggie.

td5man wrote: »

AIB are if your BRAVE ;-)???😀😊ðŸ˜; -)

What you have to get up at 5am for them