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Agriculture Credit AnalysisAgriculture credit analysis should include on site investigation of the overall resources, land, buildings, improvements, livestock and machinery, and personal living habits. These formal inspections are a key element in agriculture credit analysis and can be used to monitor inventory and possibly to conduct appraisals of real estate, livestock and machinery, as well as a check of security and collateral.Agriculture credit analysis should take into consideration the quantity and quality of land, including explanation of leases and land contracts and other pending situations. The farm visits should include a general observation of the amount and condition of livestock, machinery and buildings. Available storage and state of repair of machinery often can be a clue to future credit needs. Also, an environmental inspection may be required in the agriculture credit analysis. Agriculture credit analysis should critically evaluate the effects that economic and market trends have on the farm business. Forecasts, outlook, and other projections on costs and expenses associated with various agricultural enterprises can be helpful in determining overall health of the farm business and the customer’s needs, desires, and strategies for success. The maturity and trends of the agriculture industry the producer is involved in is also critical to the overall success of your agriculture credit analysis. The number and locations of support services, suppliers, and markets frequently has a correlation to costs and prices in the agriculture credit analysis. Agriculture credit analysis should evaluate the financial situation and management of an agricultural business and frequently involves more than agriculture credit analysis of the basic financial statements. You as a lender should look at the health and age of the individual requesting credit as well as that of the entire family when conducting your agriculture credit analysis. The stability of family relationships, evidence of estate planning or transfer of farm assets, and short/long term goal setting should be prime considerations in your agriculture credit analysis. Agriculture credit analysis should address issues like: Do they have their goals written down? What is the mission of the business? Is there a balance between the business and lifestyle? Education and practical experience should be observed, as well as how management techniques are applied to the farm operation. Examination of both personal and business philosophies on the use of credit and investing for the education of children and retirement is an important part of the agriculture credit analysis. Agriculture credit analysis is where ECI began in 1985. Today, our flagship product, Web Equity Manager®, calculates a complete agriculture credit analysis on any loan type, from the simplest loan requests to the most complex agriculture and related commercial/small business credits utilizing the Farm Financial Standards Ratios and RMA Industry Comparisons. Credit bureau reports can be pulled from within the Web Equity Manager® system and lenders can include that information in their scoring and rating parameters. Web Equity Manager® also provides the Fair, Isaac LiquidCredit® analytic and decisioning service for small business lending, including the industry-leading Small Business Scoring ModelsSM (SBSSSM) functionality so lenders can quickly and confidently process loans up to $250,000 with little or no financial data. Agriculture credit analysis training is provided by ECI via instructor-led online or self-paced online courses throughout the year. Agriculture credit analysis courses cover the following topics:
Click on the "FREE Online Demo Form Here..." link below (or call ECI) to schedule a live online demonstration of Web Equity Manager® agriculture credit analysis capabilities today. 1-800-264-0787 ext. 200 ©
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