Understanding CCC Loans for Ag Lenders
CCC (Commodity Credit Corporation) loans are offered to farmers through local USDA FSA (Farm Service Agency) offices.
CCC Loan utilization declined during the higher crop prices of 2007-2013.
Now that crop prices are much lower; farmers are again storing more grain and relying upon CCC loans to provide temporary funds until they sell grain months later. Others with low taxable income due to holding grain will take a CCC loan and report it on Schedule F tax forms as income to bring farm taxable profit slightly positive.
- Why farm producers take CCC Loans
- Treatment of CCC loans as loans versus loans as income by producers and IRS
- How farm accounting and reporting should handle CCC transactions
- Effects of loans as loans versus loans as income on balance sheet and income statement calculations and ratios
- FSA/CCC loan forms and interpretation
- Lending policies, understandings, or covenants for customers with CCC loans
Lending officers working with farm producers, Credit analysts reviewing farm production customers, Loan documentation staff involved with farm production customers, Other personnel needing a working understanding of CCC loans, Loan committee members reviewing farm producer customers
Dr. Paul Gorman provides consulting services to owners and operators of farm and small business. Paul’s clients tend to be decision makers desiring to take their business to the next level. This may be in moving from cash to managerial accounting or in refining and improving their business operations. Farmworks financial and production accounting are a key focus of the business. Dr. Gorman also conducts research and prepares reports for agricultural commodity groups and develops and presents seminars to agricultural lender groups. Paul also provides coaching and advising solutions to individuals and entities wishing to develop long-range business plans, estate plans, and farm transition plans.
Institute of Certified Bankers: Visit http://www.icbmembers.org/login.aspx for instructions regarding self-reporting. Estimated credits: 1.5 CE Credits
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