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Captive finance companies: the new competition?

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  • Boehlje, Michael

Abstract

Farm supply/equipment vendors are increasingly providing full- season credit to farmers, with the captive finance companies emphasizing their one-stop shopping convenience to win business. The companies guard against risk by dealing only with trustworthy customers, requiring a first lien on the inventory, financing only liquid assets, and requiring evidence of repayment. Banks can compete with these companies by stressing bank flexibility. With a bank loan, the borrower has a choice in where to buy inventory and how to use the loan money.

Suggested Citation

  • Boehlje, Michael, 1993. "Captive finance companies: the new competition?," American Bankers Association, American Bankers Association > Journal of Agricultural Lending, vol. 6(3).
    • Handle: RePEc:ags:abajal:336261
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    File URL: https://ageconsearch.umn.edu/record/336261/files/ers2022-23-0214.pdf
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