55 terms

The Farm Credit System Vocabulary

STUDY
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Calculate working capital
current assets - current liabilities
Farm Credit System (FCS)
-a national network of lending institutions that provides agricultural financing and credit
-established by congress in 1916
-privately owned, government-sponsored enterprise that raises loanable funds through the sale of Farm Credit Securities to investors
Community based
-FCS knows the business, community, and market.
-don't take deposits instead raise $ by selling system wide bonds on wall street.
- FCS owned by borrowers
Who are the customers?
farmers, ranchers, and agribusinesses
Production Credit Association (PCA)
-short or intermediate loans
-like operating expenses, farm equipment, livestock, farm buildings, capital improvements
Federal Land Credit Association (FLCA)
-long term
-like real estate mortgages, refinance existing mortgages, other debts
Agricultural credit Associations (ACAs)
-formed around the country through the merger of PCAs & FLCAs
-offer both long & short term
Who planted the seeds of the FCS?
President Theodore Roosevelt in 1908
How many banks & lending in 1980?
37 banks; 1,000 lending
How many banks & lending now?
4 banks; 69 lending
Farm Credit Leasing Services Corporation
provides equipment
Federal Farm Credit Banks Funding Corporation
manages sale of system wide bonds& motes in capital markets
Farm credit financial partners Inc. (FPI)
provides info technology & financial services
Farm credit Foundations
provides human resources
Farm Credit Council (FCC)
represents interest & provides wide range of business services
Farm Credit Administration (FCA)
examine & ensure safety & soundness of all system institutions
US Ag Bank, FCB:
-formed in 2003
-result of the merging of FCB of Wichita & western FCB
agricultural credit association (ACA)
result of the merging of FLBA & production credit association
Agricultural Credit Bank (ACB)
result of the merging of Bank for cooperatives (BC) & FCB
Bank for Cooperatives (BC)
provides lending & other financial Services to farmer-owned cooperatives, rural utility, rural water/sewer systems
Basis Point
1/100 of 1%
CoBank
only ACB
Farm Credit Administration (FCA)
provided low-interest farm loans and mortgages to prevent foreclosures on the property of indebted farmers
Farm Credit Bank (FCB)
provides services & funds to local associations
Federal Agricultural Mortgage Corporation
Federal agency established in 1988 to provide a secondary market for farm mortgage loans. Informally called Farmer Mac.
Federal Land Bank (FLB)
A part of the Federal Farm Credit System. It provides long term loans to farmers and ranchers for various agricultural purposes
cooperative
A business that is owned by the members it serves and is managed in their interest.
Character
individual or entity
Capital
Financial position & progress
Capacity
repayment capacity
conditions
basis of approval
collateral
collateral
Current Assets
items that can or will be converted into cash within one year
Intermediate Term Assets
assets which have Economic lives between 1-10 years
long term assets
assets that are expected to be used in business operations for longer than ten years
Current Liabilities
liabilities due within a short time, usually within a year
Intermediate Term Liabilities
obligations due & payable between 1-10 years
long-term liabilities
liabilities owed for more than 10 years
Contingent Liabilities
Liabilities that may arise from past transactions if certain events occur in the future.
Equity
amount of capital invested or earned in an entity (partnership)
Assets
money you have
liabilities
money you owe
Calculate Current Ratio
Current Assets / Current Liabilities
Calculate Net Worth
add up assets. add up liabilities. Then Total Assets- Total liabilities
Calculate Debt-to-Equity Ratio
Total liabilities / Net worth
Calculate Farm Credits current collateral basis on the FLCA farm real estate loan
loan balance/ property value
calculate the debt coverage ratio
total funds available- income taxes- living costs/ debt service+ capital replacement
deed
A document that transfers ownership of property from one party to another.
Balance Sheet
A financial statement that reports assets, liabilities, and owner's equity on a specific date.
cash flow
the total amount of money being transferred into and out of a business, especially as affecting liquidity.
Depreciation
A decrease or loss in value
Gross Income
the total amount of money made in one year by a person, household, or family unit
Gross Loan
Total liability including that advanced for FC stock
lien
A legal claim or hold on property, as security for a debt or charge.
mortgage
a long-term loan extended to someone who buys property
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