Education, work experience, and cash flow are key factors that will ultimately lead to your farm’s growth and profit. How are these aspects measured? It varies from borrower to borrower. Cash flow is the difference between revenues and expenses that a business incurs in any given period. If there’s more cash coming in than going out, the cash flow is positive. If expenses are higher than revenue, the cash flow is negative.
Underwriters then look at various aspects of cash flow when funding a loan, including revenues and expenses, to determine a borrower’s ability to repay the loan. If the borrower is being funded for new house construction, it is possible that their Integrator will offer him or her flock bonuses.
Once a borrower’s loan is funded, there will be ongoing factors that affect the business’s cash flow. How you manage your business expenses, which includes payroll, loan payments, and insurance is crucial to overall cash flow.
Live Oak Bank's key focus is to make sure the pulse of the business is healthy and that the borrower is performing to his or her best ability. Having cash flow as a key component of managing your business allows you to preserve your money and possibly find new savings.
Read more to learn about chicken farm cash flow analysis breakdown.
