FOC Bank #

FOC operates one central bank called Maize Bank.  The aim is to provide fair and balanced access to lending for everyone, while also protecting the long-term economy. We don’t want personal relationships to dictate your interest rate or whether you can access funds, nor do we want to encourage unhealthy growth which may have an adverse effect on the long-term economic balance of FOC, or lead to farmers over-extending and going broke. With these changes, providing you are eligible, you will be able to access lending when you need it most. Central Bank cash balances will not run dry, therefore, everyone will be able to access loans if they are eligible and meet the criteria.

 Some key points:

• All members of the community will be judged by the same standards when deciding the terms of the loan.
• Interest rates and eligibility will be scored on three main criteria: loan term (i.e. number of months); Risk assessment based on Debt to Asset (DTA) ratio; and finally, whether a down payment has been offered.
• DTA cannot exceed 80% on any loan. Applications for loans with greater than 80% DTA will be denied.
• Players may only withdraw a loan once every 12 days, this is in place to prevent loan snowballing.
• A player may only have 2 active loans at any time. A player must have paid off at least 50% of the existing loan to be eligible for another. You may not “refinance” loans if you have 2 active loans. One must be paid off first.
• A player can only have a total of $3 million dollars in any combination of loans at one time.
• Late and missed payments will now be subject to a standard procedure which includes fines and eventually liquidation.
• Direct loan applications to Maize Bank.
• Down payments are only available to FMs with 100 acres or fewer. If you wish to use the down payment option, you would not also be able to benefit from the small farmer discount. It is one or the other.
• Down payments can only be used to purchase land. The total borrowing amount cannot exceed the purchase price of the land minus the downpayment amount. See down payment section below for example.
• Loan payments are automatically withdrawn at 5:00pm UTC daily.

Current FOC Bankers are: #

• Onefox (Lead)
• Paul
• Scorpio
• Shady
• Usmcnav

Common Commands: #

Please use these commands in #bot-stuff for loans

/loan equity – gives you an idea of where you stand financially and what your debt to asset ratio would be.

/loan apply – requires you to enter bank name (Maize), amount requesting, how many months you want the duration of the loan, and why you need a loan

/loan accept – requires the loan ID that was offered

/loan decline – requires the loan ID that was offered

/loan pay – requires loan ID and amount you are paying

/loan list – list of current loans under your user ID

/bal – provides a listing of current balances of checking, loans, and server funds

Reasons to take a Loan: #

Loans can be offered to expand your Farming Empire for the following

• New Equipment
• New Land
• Consolidation
• New Placeables

Loan Types: #

 New Farmer Loan

1. Only New Farmers within 30 days of FM application may apply
2. Must have established a farm with property.
3. Max of $1m depending on DTA. DTA ratio cannot exceed 80%, therefore borrowing eligibility may be lower than $1m.
4. 96 month duration
5. Interest Rate at 2%
6. New Farmers can only apply one time
7. Must be the first loan taken by FM.
8. Members that prestige do not qualify for this loan type

Small Farmer Loan

1. Farm Loan for FMs with less than or equal to 100 acres
2. Interest Rates are Standard Rates minus 2% or
3. Down Payment APR
4. Small Farmers can only chose one option, either interest reduction or down payment, not both.

Standard Farm Loan

1. Farm Managers with More than 100 acres
2. Standard loan with no Down Payment option
3. Standard loan with no special interest rates as above

Debt to Asset Ratio #

DTA is calculated by dividing your total existing and proposed loan value with your total asset value. Running the /loan equity command in the bot-stuff channel on discord will return the information below with specific values for your farm:

Farm equity information for Farmer A

– Checking: $700,000

– Active Loans: 1

– Loan ID 0012: Balance: $600,000/$1,500,000

– Land Value: $1,650,000

Server 1

– Balance: $8,000

– In-Game Loan: $100,000

– Total Assets: $1,400,000

– Income (Past 6 Months):  $0

• LOAN VALUE is calculated by adding together all existing loan balances including in-game loan balance, and also the loan amount for the loan you intend to apply for.
• ASSET VALUE is calculated by adding together Land Value and Total Assets. (Cash balances are not included in this calculation).
• DTA is calculated by dividing LOAN VALUE by ASSET VALUE. See the example below for a $800k loan application:

• LOAN VALUE = Active Loan Balance (600,000) + In-Game Loan Balance (100,000) + Proposed Loan Amount (800,000) = $1,500,000
• ASSET VALUE = Land Value (1,650,000) + Total Assets (1,400,000) = $3,050,000
• 1,500,000 / 3,050,000 = 0.49
• DTA = 49%

Interest Rates:  #

Interest Rates are based on length of loan from 4 years to maximum length of loan of 8 years.

• 6% for 4-year (48 month) loans
• 6.5% for 5-year (60 month) loans
• 7% for 6-year loans (72 month)
• 7.5% for 7-year loans (84 month)
• 8% for 8-year loans (96 month)

Once again, no lending over 8-yr time period.

Additional Risk Factor #

As with any lending institution, we will need to assess a Risk factor in addition to the Interest Rate.  ARFs will be applied by Debt-to-asset ratio:

• Loans under 50% DTA get base rate.
• 51% to 60% add +.5% APR
• 61% to 70% add 1% APR
• 71% to 80% add 2% APR
• 80%+ Bank will not lend at this ratio

Down Payment #

If you are eligible for a small farmer loan (i.e. you own less than or equal to 100 acres), you may decide to take advantage of the down payment option. If you do go ahead with the down-payment option you will not be eligible for the 2% small farmer discount; you can access one or the other, not both.

Down payments can only be used for land purchases. Bankers will verify the purchase details with your realtor to confirm that your statements were accurate.

The total amount borrowed cannot exceed the purchase value of the land minus the downpayment.
 i.e if the parcel is valued at $1m, and you wish to use a downpayment of $200k, the most you would be eligible to borrow is $800k.

Down-payment APR reduction:

• – 10-19% of loan amount remove 1 %
• – 19-29% remove 1.5 %
• – 30-39% remove 2%
• – 40-49% remove 2.5%
• – 50-59% remove 3%
• – 60-69% remove 3.5%
• – 70-79% remove 4%
• – 80-89% remove 4.5%
• – 90-95% remove 5%
  

Late Payments #

Late payments are defaults on a loan.  We are changing our handling of late payments.

1. Late Payments are defined as an Automatic Payment that has failed.
2. Late Payment penalty is a minimum $5,000 up to the amount of the Missed Loan Payment x 1.25.  See Below for example.
3. Manual Payment will not be required once Penalty has been processed.
4. If you miss 3 payments on your current loan, you will not be able to obtain a second loan until the first is paid in full.
5. If you miss 5 payments on your current loan, Admins will liquidate your assets to equal the amount to pay off the loan balance.
6. If you have missed 5 or more payments or have had a liquidation, you are not eligible for a loan for a period of 30 days.

Examples of how Late Payments are processed:

You miss a payment and your total payment is less than or equal to $5,000.  The penalty will be 5,000 x 1.25 for a total penalty/payment of $6,250.

You miss a payment and your total payment is $50,000.  The penalty will be $50,000 x 1.25= $62,500.  Penalty will be $62,500.

How to Bank: #

Ok, now that you have the basis of how the Maize Bank does its business and what commands are available, we will discuss how to use the system.  

You decide you need a new property but need a loan to purchase it.  You go to the #bot-stuff channel and use the /loan apply providing all the required information.  A Banker will receive your application, look at your creditworthiness, and extend you an offer through DMs from Farmer Jim.  That DM will include all the terms and Loan ID.  If the terms are good for you, go back to the #bot-stuff channel and use /loan accept command entering the Loan ID provided in the DM.  If you don’t want the offer, you will need to refuse it in the #bot-stuff channel using /loan decline.  Once accepted, the requested funds will be immediately deposited into your Checking Account for use.    

If you have any questions please reach out to your friendly neighborhood Bankers.

Loan Example: 

Figures are for illustration purposes only.

A player who is a Small Farmer as defined above submits an application for a $350k loan over a 4 year term to Maize Bank against a purchase for land costing $700K to Maize Bank using /loan apply in the #bot-stuff channel.  The player has a DTA ratio of 58% and wants to put down a $350,000 down payment.

• 4 year loan = 6% base rate
• 58% DTA = add 0.5%
• 50% down payment = remove 3%
• final offer = 3.5% APR for $350k borrowing over 4 years

Special Note: #

Random spot-checks are run regularly on financial dealings in FOC to ensure that the rules are being followed and no funny business is taking place.

In one of our recent random spot-checks we discovered that a member of the community had applied for a loan at the same time as having leased a large amount of equipment from another farmer. The presence of this leased equipment significantly increased the value of this particular farmer’s assets and drastically altered their debt to asset ratio. The result was that they were able to borrow far beyond their normal ability.

We are working on features that will reduce the ability to take advantage of this in the future, however, please be aware that we do conduct random spot-checks and if we find evidence of wrongdoing, intentional or otherwise, we will take action to correct any ill-gotten gains. Please don’t risk it, if you are unsure please seek advice from a banker. It may seem like we are taking the rules to extremes, but this is simply to protect the integrity of FOC, the economy and the community.