Any successful business, whether it's an agribusiness firm, farm, corporation or small business, must meet certain criteria if it is to be successful over a period of time, particularly if credit is used. Repayment ability and capacity. Liquidity and solvency. Profitability and financial efficiency. Both lists, though not exclusive, nor in any specific order of importance, provide a systematic checklist that either a farmer or lender can use to assess the financial status of the business.
Credit can be a soft cushion or a migraine headache depending upon how it is used.
Credit is an important money management tool, however, excessive monthly interest charges can absorb dollars that might be spent in better ways. Obtaining and Using Credit Effectively - David M. Kohl, Cornell University. When You Need It - Judy McKenna, Colorado State University. Credit Shopping for and Selecting - Judy McKenna, Colorado State University. Calculating Interest Charges on Loans - Norman Dalsted and Paul Gutierrez, Colorado State University.