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Southern MN | Every operation is different and it is literally impossible to talk big picture details on an operation without knowing the details. There are just so many important details left out from this entire exercise.
Even more interesting is the fact that this loan was likely approved during a timeframe when many of the “lived through the 80s farm credit and banking staff” were still part of these loan committees, etc. Apparently, nothing was retained from the first go around and talk about a disservice to this borrower if this loan was truly approved coming at the tail end of a high commodity cycle.
Hindsight is 20/20…I get it….but you absolutely must shock test every credit of this size. For both your borrower and your portfolio. What happens if prices fall out of bed, they lose a major contract, can they reamortization debt, sell extra equipment, how high of interest can they handle, and on and on and on. What is plan B, plan C.
Entire deal seems very sloppy. | |
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