Chapter Four Flashcards
- Name two (2) sources of internal credit.
- Name two (2) sources of external credit.
- What is meant by a variable rate of interest?
- What is meant by a fixed rate of interest?
A fixed rate mortgage has a rate of interest which doesn’t change for a set period of time
- What does A.P.R stand for?
Annual Percentage Rate
- Describe two (2) ways farmers can address cash flow issues on their farms?
- What is the role of a farm plan application in a loan application?
- What supporting documents would be needed when applying for a bank loan?
- Interest rates can be categorised into three types. List two (2) of them?
- Explain one (1) common reason borrowers get in trouble.
- Name two (2) things that can influence loan interest rates.
Give an example of a productive loan?
- What is a creditor?
- What is a debtor?
- Name one (1) reason a bank may refuse you a loan?
What is the difference in a secured and non-secured loan?
- What type of work is Value Added Tax (VAT) refundable on when work is carried out on farms?
- Select the one correct answer from the list of four options below.
At what point does the client of the hire purchase company (i.e farmer) actually own the asset (i.e tractor) that they purchased through the hire purchase company?
a) Once the deposit and the first repayment is made.
b) Once half the repayments are made.
c) Once the final repayment and any outstanding repayments are made.
d) Never.
c) Once the final repayment and any outstanding repayments are made.
- Which of the following organisations DO NOT provide a financial advice services to farmers?
a) IFAC
b) Teagasc
c) FBD
d) MABS
C - FBD
A young farmer is applying for a loan to put up a shed.
Describe in detail how they can maximise their chances of receiving the loan they apply for. (5 marks)
- Build good credit history/relationship with provider. -Saving Weekly/monthly,
2: show good repayment capacity on current loan if you have one. -no overdrafts. Credit card repayment.
3:Shop around -unsecured,/ secured loan -different interest rates(bank,credit union)
4:Develop farm business which shows lender plans how to intend to progress farm. -submit e-profit monitor/farm accounts to show provider if your making a profit/loss and show your tracking production.
5:If you already have a loan out with provider show your ability to pay back on time, if not communication is key.
6:No gambling/wasting of money.
7:Show history of off farm income(full time job)payslips.
Describe in detail five (5) ways a farmer can establish a good credit rating?
List two (2) ways in which you can reduce bank charges?
Pay loans on time and pay overdraft on time.
Telephone or internet banking can reduce costs on certain transactions such as account transfer.
Sources of finances can be divided into Internal and External sources. Please list and describe two (2) interal sources and two (2) external sources. (4 marks)
List five (5) pieces of information that is required for a loan application form and why is it required. (5 marks)
Describe in detail five(5) qualifying conditions of the Young trained Farmer Stamp Duty Relief.
