Input Capital-Armegedon??

[AlbertaFarmer5]

I thought that 3.3 million interest on 8 million sounded excessive, but a quick calculation based on 3.5 years, and assuming the entire 8 million was the original capital, works out to just over 10% per year compounded.

It is probably worse than that, since the 8 million likely doesn't all date from 2014, but grew over the 3.5 years. But still not near payday loan rates. If one assumes they are lenders of last resort, and therefore taking on riskier loans, then getting at least double bank rates doesn't seem completely unreasonable.

But if they are secured by both land and grain, then the risk should be very low eventually, as compared to a payday loan.

Edit to add, that I negelcted to include grain already delivered under input capital's name, which is unknown to us. Assume that went to interest first, not principal, so the rate would be worse than 10%.

[bobofthenorth]

Sounds like he has been for awhile.

[farmaholic]

Court rooms are full of Farmers in sask !

As Plaintiffs or Defendants?

[Richard5]

Owing $3.3m interest on a $8m dollar debt started in 2014 tells you all you need to know about input capitals business plan. The balame is not all input captial though. Sounds like the operation was so severely stressed with slow grain shipment that they had no choice, and once you start pretty tough to walk back. The interest rates must be horrendous on missed payments. Even worse than scotiabanks %18 with cps...lol.

TM, what a crock of shit, this is no reason to turn to loan sharks like input. One, if the farm would be mananged properly, maintain a strong balance sheet with cash reserves, slow deliveries wouldn’t put themselves into an immediate choice to turn to Input. Second, if they have the grain inventory and is a good operation, there is no bank that wouldn’t step in and help out in the interim.

There is way more to this story. I would sure like to know those details. I think its yet another too large a farm that way too deep in debt prior to getting in the paper over loan sharks

[FarmJunkie]

I’ve been sleeping under a rock. Who u guys talking about?

[tmyrfield]

[QUOTE=Richard5;373791]TM, what a crock of shit, this is no reason to turn to loan sharks like input. One, if the farm would be mananged properly, maintain a strong balance sheet with cash reserves, slow deliveries wouldn’t put themselves into an immediate choice to turn to Input. Second, if they have the grain inventory and is a good operation, there is no bank that wouldn’t step in and help out in the interim.

There is way more to this story. I would sure like to know those details. I think its yet another too large a farm that way too deep in debt prior to getting in the paper over loan sharks[/QUOTE

Richard....Its pretty hard to dispute what you are saying.


Like payday loans, rent to own furniture dealers and used auto dealers with nobody turned down for a loan, there must be a demand for such services, evidence being is that they exist.

I totally agree with the premise that most financial institutions would do a major restructuring of debt using current and long term assets to secure a loan to make a farms payments more match asset life and farm cash flow requirements while maintaining operating capital.

input capital must require a farm to use the cash to clear off titles that can be used to secure the income stream. It occurs to me that the cash is usually insufficient to adequately increase the operating capital of the farm for more than a year or so. I think that this feature is part of input capitals business plan to acquire land.

In many cases I think farmers are great at what they do (production) but when trying to increase profits the easiest(most fun) route to take is expanding, but that is often not the best way. Bigger isn't better, better is better. One cannot usually grow your way out of a problem.

Input capital uses techniques in their advertising to appeal to farmers who want it all and want it now. Obviously it is working for them.

Entering a streaming deal with input capital is no different than any other deal imho dyodd!

[LEP]

I thought that 3.3 million interest on 8 million sounded excessive, but a quick calculation based on 3.5 years, and assuming the entire 8 million was the original capital, works out to just over 10% per year compounded.

It is probably worse than that, since the 8 million likely doesn't all date from 2014, but grew over the 3.5 years. But still not near payday loan rates. If one assumes they are lenders of last resort, and therefore taking on riskier loans, then getting at least double bank rates doesn't seem completely unreasonable.

But if they are secured by both land and grain, then the risk should be very low eventually, as compared to a payday loan.

Edit to add, that I negelcted to include grain already delivered under input capital's name, which is unknown to us. Assume that went to interest first, not principal, so the rate would be worse than 10%.

Actually the way I read it, the interest was $3.3 million on an original principal of $4.5 million for $7.8 million total. Depending on details on the original disbursement and the payment from seized grain, I come up with 16ish % interest.

This loan likely involved the payout of operating loans and input accounts that weren't revolving and had built up from past losses. When faced with the option of an auction sale versus a hail mary, some choose the latter. The only saving grace might be; has the land they owned appreciated enough since 2014 to cover the $3.3 million in interest as the $4.5 million principal was owing anyway.

In my area land has increased between $900 and a $1,000 an acre in that time. So if they owned 4,000 acres or more, they are money ahead. The best course of action would have been to get in front of the situation and control the sale of assets to maximize the sale price.

[Oliver88]

Stock price is $1.50, close not far off a year low.

[iceman]

Stock price is $1.50, close not far off a year low.

The last time it was here the boys came into be a bid for the asks. Maybe they will again but there appeared to be some inside selling a month back.

Iceman Out with the Lear jet in with a paper airplane built wrong which flys back at you and hits you in the face.

[farmaholic]

The last time it was here the boys came into be a bid for the asks. Maybe they will again but there appeared to be some inside selling a month back.

Iceman Out with the Lear jet in with a paper airplane built wrong which flys back at you and hits you in the face.

LOL...belly laughing. Chuckling.

[farmaholic]

The last time it was here the boys came into be a bid for the asks. Maybe they will again but there appeared to be some inside selling a month back.

Iceman Out with the Lear jet in with a paper airplane built wrong which flys back at you and hits you in the face.

......multiple income streams.....taking people's money in more than one way. There's got to be a motto in there somewhere!

Or "STREAM your canola with us and be up Shit Creek without a paddle!"

[Tucker]

The page view count for this thread is very interesting. Many times more views here than most other threads. Very telling to know that other entities will finally pay attention to what farmers say when they think there is a very good chance at getting into their wallets.