It was a good day for the bank today.

New customer

In walks a  farm couple. They are a bit short of cash at the moment. They have been ploughing profits back into farm improvements and writing those improvements off to get the tax deductions. It all makes the financial statements look crook, but there’s a good cashflow projection to show a few years of excellent profits ahead.

Opportunity

Banker thinks, “Improvements are an integral part of farming life. They never end. Farms can absorb everything the farmer throws at them. Cash shortage is because it is losing money and chances are it will go on losing money. How much do they want? What’s the farm worth? I know what a hectare is worth around the district, so just where are they? Oh! There. Ok. Plenty of scope before we’d have to sell them up. “

Satisfying the customer

To the farmers, “ Well, we could possibly lend you that over 15 years. I could do the first three interest only if that'd help.”

Long-term lending

Thinks to himself,” That avoids any embarrassing conversations about how hard repaying the debt will be, because they only absorb what the payments are in those first interest-only years are. If they keep on spending money, they’ll be back. Then we can give them an overdraft from which to pay the interest. It will look like they are paying it but it will really just be accumulating it onto the debt through the overdraft. They'll have plenty to spend. ” “Done well today!”