Captive finance companies: the new competition?

Michael Boehlje

American Bankers Association, 1993, vol. 06, issue 3

Abstract: Farm supply/equipment vendors are increasingly providing full- season credit to farmers, with the captive finance companies emphasizing their one-stop shopping convenience to win business. The companies guard against risk by dealing only with trustworthy customers, requiring a first lien on the inventory, financing only liquid assets, and requiring evidence of repayment. Banks can compete with these companies by stressing bank flexibility. With a bank loan, the borrower has a choice in where to buy inventory and how to use the loan money.

Keywords: Agricultural; Finance (search for similar items in EconPapers)
Date: 1993
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