How much debt can my cattle operation afford?
By Ian McLean This article was first published on Beef Central A producer going through the process of succession recently asked us the pertinent question 'how much debt can I afford to take on with the property?'. This is a critical question for all businesses to ask themselves and the answer is unique to each business, however what a bank is prepared to lend you and what debt you can afford will usually be two different figures. How much debt a business can afford will be a function of its profitability, over what period you would like the debt to be paid off, and what funds the business and family needs after debt servicing costs. A further explanation of each of these factors is below. The profitability of a business is…