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The Character Factor in Farm Business Management
This article was first printed in the Jan/Feb 2010 issue of the Organic Broadcaster, published by the Midwest Organic and Sustainable Education Service.
Students participating in agricultural finance courses as well as new agricultural lenders quickly learn one of the basic concepts of lending called the ‘Five C’s of Credit’. The ‘Five C’s’ encourage a lender to review an applicant’s loan request based upon five core areas: character, capital, capacity, collateral, and conditions. Analyzing these areas helps ensure that a sound credit decision is made and that the loan will be repaid in a timely manner.
While this list is not all inclusive, it addresses some important facets of the character factor. These areas are not only important to agricultural lenders; they are important to successful farm business management, regardless of the farm business’ size, scope, and type.
Amber Bennett is Vice President- Farm & Home at Badgerland Financial, serving farmers, rural homeowners, and rural communities in 33 counties of southern Wisconsin. Amber works with a team of lenders who specialize in serving the unique financial needs of family farms, including operations focused on organic products, sustainable practices, and local food. She grew up on a dairy and livestock farm in southwestern Wisconsin and has 18 years of agricultural lending experience. She received a Bachelor of Science degree in agricultural economics from U.W. Platteville and an MBA from U.W. Whitewater. For more information, check out www.badgerlandfinancial.com.Return to TOP