2. Robert K. Beymer
Current Position: Chief Financial Officer, Senior Trust Officer
Employment History: The Kearny County Bank to Present
State of Kansas – Bank Examiner
Educational Background: Lakin High School Graduate, 1974
Kansas State University Graduate,1978,
BS in Business Administration and Finance,
Minor in Economics
University of Colorado Graduate School of Banking

3. CREDIT How to Get It & Keep It
The 3 C’s of Credit

4. The 3 C’s of Credit
Capacity
Collateral
Character

5. Capacity Do you have the ability to repay debt? How much do you earn?
How much do you owe?
What else do you own?

6. How much do you earn?
Sources of Income
Stability of Income

7. Sources of Income Wages Interest & Dividends Business / Farm Income
Government Entitlements (Social Security/Welfare
Other

8. Stability of Income Length of Employment Length of Prior Employment
Cash flow variations
Termination of entitlements

9. How much do you owe? Amount of other debts Purpose of other debts
Payment amount on other debts

10. What else do you own? Other assets that can be used for repayment
Real Estate
Stocks / Bonds / Investments
Savings
Vehicles
Machinery & Equipment

11. Collateral The Lender’s backup plan
Secondary source of repayment if borrowers fails to service debt from his/her capacity.

12. Types of Collateral Tangible Intangible
Can take physical possession of
Intangible
Assets of uncertain quantity and value

13. Tangible Collateral Types Loan to Value (LTV) Real Estate 70% - 100%
Vehicles 50% - 100%
Equipment 50% - 75%
Grain 75% - 90%
Stocks 50%
Bonds 75% - 90%
Savings 100%

14. Types Of Intangible Collateral
Types Loan to Value (LTV)
Growing Crops 70% - 80% (insured)
Growing Crops 50% - 60% (uninsured)
Blue Sky 50% - 75%

15. Collateral Insurance
Insurance will be required if you don’t have sufficient income and other asset capacity to repay your loan if the collateral were damaged or destroyed.

16. CHARACTER
The desire and willingness of an individual to repay debts

17. Factors of Character
Credit History
Age
Education

18. Credit History Credit Report
Shows repayment histories & high credit limits
Shows collections, judgements, bankruptcies

19. Credit Score

20. Vehicle Pricing Matrix < 5,000 Miles
Loan Pricing Example
Vehicle Pricing Matrix < 5,000 Miles
Borrower Rating / Credit Score
LTV
A / > 750
B /
C /
D /
E / < 625
<75%
4.000%
4.500%
5.250%
6.250%
7.500%
75-80%
4.050%
4.550%
5.350%
6.450%
7.750%
80-85%
4.100%
4.650%
5.550%
6.850%
8.250%
85-90%
4.150%
4.800%
5.850%
7.450%
9.000%
90-95%
4.200%
5.000%
10.000%
95-100%
4.250%
6.750%
9.250%
11.250% %
4.300%
7.350%
10.450%
12.750%

21. Other Factors of Character
Age
Lenders can’t discriminate based on age, but it can be used as a factor in determining the credit worthiness of a borrower.
Education
Generally, the more education a person has the easier it is to receive credit.

26. LENDER DECISION
APPROVED

31. LENDER DECISION
DENIED

32. Top 10 List of Stupid Things People Do With Their Finances
Not saving money to pay income taxes
Gambling more that you can afford
Not understanding terms of loans and credit agreements
Refinancing debt & extending repayment terms
6. Borrowing long term for short term expenses

33. Top 10 List of Stupid Things People Do With Their Finances
Not budgeting – no planning
Getting over extended on credit cards and other debts
Using credit cards to pay regular monthly expenses
Paying the minimum payment on credit cards
1. Not establishing reserves for emergencies

34. They make money by taking advantage of you!
THE EVILS OF CREDIT CARDS
They make money by taking advantage of you!