The disadvantages of the system are in the types of restrictions that apply to the loans. Banks for Cooperative customers must invest in stock in the BCs in proportion to their loan amount. This stock allows the co-op to vote for BC representatives on the Farm Credit boards of directors, and to vote in other BC business affairs. Since cooperatives' needs correspond to the seasonal nature of farming, the Banks for Cooperatives provide seasonal loans which mature within 18 months. 5. BCs also provide long-term loans for everything from remodeling to purchasing land.
Lines of credit are available.
Interest rates vary, depending on the type and term of the loan. One of the best ways the Banks for Cooperatives help agriculturalists is by promoting U.S. agricultural exports. The CBC also participates in loans from district BCs when the amount of credit needed by a cooperative customer exceeds the district lending limits. The BCs offer additional services including budgeting, long-range planning, credit standards and auditing. Their principle objective is to improve the income and well being of producers of food and fiber.