What are banks looking at when you apply for loans?

[mbdog]

Also my 2 cents....I hope this "downturn" in the energy/ag sector is fully designed to ripple thru the broader economy, not just these sectors who repeatedly seem to take one for the team, while urban growth/expansion seems oblivious to this fact. Perhaps it works on the "cultural" change required. Sorry for getting political on this thread, Charlie, but its linked to your question. Another 6 months-year of losses, another round of auction sales could have a tremendous effect on borrowing/s.

[jamesb]

Have a business plan. Back in the 80's when thing went down most farmers had no business plan, didn't do the COP exercises, and mostly planted wheat hoping the CWB would pay them a good price. Farmers today are far better managers to provide better planning to the banks. Just like the sub prime mortgage deal in the US a few years ago people were given loans that they had no business getting. Banks in the 1980's were loaning money to people doing no business planning. I do not believe that will happen today like it did then.

[hobbyfrmr]

Jamesb, I agree. Well said.

Debt/asset ratio
Debt/equity ratio
Debt/service ratio
Equifax credit rating.

[JSelte]

CharlieP I can tell you first hand as I work for a credit union. we look at various ratios including current ratio, debt to equity, debt service ratio, and loan to value. I can tell you that we are one of the more conservative lenders for agriculture but that does not mean i cant spin a web of words to mitigate ratios.
I can tell you though that the consumer lending is completely opposite especially when it comes to CMHC mortgages.