Financial Opportunties for landowners

Information about Financial Opportunties for landowners

Published on December 19, 2007

Author: Burnell

Source: authorstream.com

Content

Serving Alabama, Louisiana, Mississippi & part of Tennessee:  Serving Alabama, Louisiana, Mississippi & part of Tennessee Farmers Cooperative:  Farmers Cooperative Stock Owned by Farmers Who Do Business with the Cooperative First South Board of Directors Elected by Coop Borrowers Regional Boards to Provide Grass Roots Input into Operation of Cooperative Government Sponsored Enterprise:  Government Sponsored Enterprise Established with the Farm Credit Act of 1933 Formerly Production Credit Association Providing Dependable Credit to Farmers and Rural Residents for 74 Years First South Farm Credit Ended 2006 with Total Loans of $1.29 Billion:  First South Farm Credit Ended 2006 with Total Loans of $1.29 Billion North Alabama $313 million South Alabama $219 million Mississippi $374 million Louisiana $223 million Commodity Distribution:  Commodity Distribution Poultry 31% Forestry 18% Cotton 13% Livestock 8% Sugar Cane 7% Catfish 4% Other 15% FIRST SOUTH FARM CREDIT, ACA:  FIRST SOUTH FARM CREDIT, ACA LOUISIANA OFFICES at: Lake Providence Tallulah Winnsboro Marksville Alexandria New Roads Zachary Amite Jennings Crowley Opelousas New Iberia Thibodaux Commercial Loan Department: Staff Experienced in Large Lines of Credit No Credit too Large w/ participation of other Farm Credit Lenders :  Commercial Loan Department: Staff Experienced in Large Lines of Credit No Credit too Large w/ participation of other Farm Credit Lenders To Be Eligible for A Loan:  To Be Eligible for A Loan Must be a Citizen of the United States Or a Legal Entity Authorized to do Business in the United States. Purpose Must be Eligible Property Must be Eligible Credit Worthy Applicant Examples of Legal Entities:  Examples of Legal Entities Corporations – S-Corp., C-Corp. Partnerships Limited Liability Company Cooperative Joint Venture Estate Trust LOAN PURPOSES FOR::  LOAN PURPOSES FOR: LAND PURCHASES COUNTRY HOME LOANS REFINANCING BUILDINGS & IMPROVEMENTS OPERATING & PRODUCTION EQUIPMENT CATTLE / LIVESTOCK OTHER FARM RELATED PROPERTIES Repayment Terms to Coincide with Income of Business::  Repayment Terms to Coincide with Income of Business: Operating Loans One Year or Less Revolving Lines of Credit Amortization of Loans from One to Fifteen Years Up to 30 Year Amortization on Real Estate with Improvements and Timber with Participation Loan Properties Eligible::  Properties Eligible: Timberland Hunting & Recreational Properties Pasture Land Crop Land Country Homes and Home Sites Almost Any Rural Property Other Properties That May be Eligible::  Other Properties That May be Eligible: Saw Mills Paper and Pulp Mills Chip Mills Cotton Gins Sugar Cane Mills Other Processing and Storage Facilities Some Commercial Properties To Determine If An Application is Credit Worthy These are Generally the Factors Considered::  To Determine If An Application is Credit Worthy These are Generally the Factors Considered: Amount, Purpose, & Terms Condition Character Capital Capacity Collateral Information Needed to Begin Application Most Loans $100,000.00 and Above:  Information Needed to Begin Application Most Loans $100,000.00 and Above Names, Addresses, Numbers Loan Request and Purpose Balance Sheet Three Years of Income and Expense Records (Income Tax Returns) Description of Collateral Other Information May be Needed Typical Loan to Purchase Real Estate 40 acres of 9 yr. Plantation & 60 acres 6 yr. Plantation :  Typical Loan to Purchase Real Estate 40 acres of 9 yr. Plantation & 60 acres 6 yr. Plantation Purchase 100 acres $300,000.00 Down Payment (15%) 45,000.00 Net Loan Amount $255,000.00 First South Stock 5,000.00 Loan Service Fee 1,000.00 Legal and Closing Costs 2,000.00 Total Loan $263,000.00 Timber Loan Program:  Timber Loan Program The loan may be placed on an amortization on a term from one to thirty years. Or the loan may be placed on a flexible note for the first three years w/ interest semi-annually and principal all due in three years. Or the repayment terms may be a combination of amortized loan and balloon payments. Timber Loan Program:  Timber Loan Program for Loans Secured by Growing Timber Repayment Terms on Land w/ Growing Timber Determined By::  Repayment Terms on Land w/ Growing Timber Determined By: Timber Cruise Growth Projection Harvest Plan Completed by an Independent / Certified Forester REPAYMENT TO MATCH PROJECTED TIMBER HARVEST:  REPAYMENT TO MATCH PROJECTED TIMBER HARVEST Upon Completion of the Harvest Plan, the Principal Payments of the Loan may be Ballooned in Intervals to Coincide with the Anticipated Future Sale of Timber. 100 Acres of Timberland:  100 Acres of Timberland Harvest Plan Projects: Thinning of 40 acres in 2 yrs. $12,000.00 Thinning of 60 acres in 5 yrs. $18,000.00 Chip-N-Saw Harvest of 40 acres in 12 years netting $120,000.00. 4. Small Saw Timber Harvest of 60 acres in 15 yrs. Netting $240,000.00. Timber Loan Repayment Schedule:  Timber Loan Repayment Schedule Interest to be paid Semi-Annually Principal Payment of $12,000.00 due Aug. 1, 2009 from timber thinning. Principal Payment of $18,000.00 due Aug. 1, 2012 from timber thinning. Principal Payment of $120,000.00 due Aug. 2019. Final Principal Payment due at timber harvest in 2022. Patronage Refund Program:  Patronage Refund Program One of the most important benefits of being a First South Member-Borrower is that you stand to share in the Association’s Profits. Most businesses return their profits to their investors, not their customers. Patronage Refund Program:  Patronage Refund Program At the end of each fiscal year, the Association Board of Directors and Management determine the net income of the Association. After retaining a portion of the income for reserves and capital growth, the Board may elect to distribute this income as a Patronage Refund. Patronage Refund Program:  Patronage Refund Program A Borrower’s Patronage Refund is based on his business activity with the association during the past year. It may be paid in cash, allocated surplus, stock, or any combination of these items. Historically, the First South Board has paid either 30% or 40% of the refund in cash and retained the balance. In Previous years the Board has approved retiring the Qualified Allocated Surplus after 5 years. Three Interest Rate Programs::  Three Interest Rate Programs: Prime Monthly Variable Libor Monthly Variable Fixed Rates from one year to ten years. SIMPLE INTEREST:  SIMPLE INTEREST NO PREPAYMENT PENALTIES ON VARIABLE INTEREST NOTES AND ALL FIXED INTEREST NOTES UP TO $3,000,000.00 Who Dat? :  Who Dat? Geaux Saints!!! Serving Alabama, Louisiana, Mississippi & part of Tennessee:  Serving Alabama, Louisiana, Mississippi & part of Tennessee

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