Also he must understand his financial position so that he can improve upon his weaknesses or liabilities. Now, let us discuss the factors taken into consideration when a dairyman's financial position is analyzed. The most important consideration to lenders is repayment ability. A large net worth with a high percentage of equity will not secure a loan for a dairyman who does not generate enough cash income to repay the loan. Two variables influencing repayment ability deserve extra attention.
Many factors affect the deduction for family living expenses.
It is important that this figure be estimated accurately so that family funds are not allocated to debt repayment. The treatment of non-farm income is also important. Careful attention to the source of the income is necessary. Ideally, this repayment calculation should be based on the last three or four years to provide an accurate picture. To account for different loan rates and terms, the repayment required for each loan is multiplied by the percentage of the total debt represented by that loan.