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Operating Loans

These are short-term loans used to finance daily business operations. Operating Loan customers access loan funds with drafts that can be used 7 days a week, 24 hours a day. Funds may also be withdrawn online, by phone and by visiting one of our offices. Full-time farmers and part-time farmers with off-farm employment may also use the loan for living expenses, education, unexpected medical expenses, hedging account financing, etc.

Credit Line Operating Loans are available to a wide range of individuals and entities eligible for FCS loans. In addition to full and part-time farmers, this product can be used for aquatic producers, harvesters of forestry products, providers of farm marketing and processing services and other farm-related businesses.

The loan may be secured or unsecured as required by credit procedures. Typically, loan terms match the customer's operating cycle. Revolving lines of credit (RLOC) can be established for up to 3 years.

Disbursements can be made throughout the loan's term and payment terms vary depending on your operations needs. Interest is due at least annually. On multiple-year RLOCs, the loan should be paid to a minimal balance annually. The outstanding balance plus accrued interest is due at maturity.

What are the loan plans?

Two different types of operating loan plans are available, depending on credit quality and customer needs. The plans available include:

• Revolving line of credit: The customer is given a maximum credit line that can be disbursed at any one time. The customer can borrow and repay as often as necessary as long as the balance outstanding doesn't exceed the credit limit. Revolving lines of credit can be written for up to 3 years.
• Declining balance loan: Allows for disbursement of funds until the cumulative disbursements total the face amount of the note. Declining balance operating loans are written for up to 18 months, depending on the operation's operating cycle.

Pricing Options

The following pricing options are available on operating loans:

• Variable Rate (30 Day Adjustable): The rate may change on the first of every month.
• 1 Yr Adjustable Rate: The rate is fixed for 12 months and then converts to variable (30-day adjustable) for the remaining term.
• Prime Indexed Loans: The customer's rate will be indexed to the Prime Rate as reported in the Wall Street Journal. The rate will be adjusted on the first of every month based on the Prime Rate as of the 10th of the previous month.
• Fixed rate: Available for customers with maximum terms up to 12 months. The loan matures at the end of the fixed-rate period.

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Features and Benefits

Feature	Benefit
Drafts: Loan funds available with convenient draft access.	You can access funds 24 hours a day, 7 days a week by simply writing a draft. There is no need to call or stop by the office to obtain money, but you still can. Funds can also be transferred using online banking. You control the use of your loan funds!
Simple interest	Interest accrues on outstanding balance only.
Monthly statements	Our convenient monthly statement helps you keep track of when your funds were used, plus the amount of your credit line that's still available for use.
Flexible payment schedules. Standard payment plans include monthly, quarterly semi-annual, or annual payments	We can develop a payment plan and maturity that fits your cash flow and production cycle.
Revolving line of credit (for customers who qualify)	You may borrow and repay funds as often as you like prior to maturity. This allows you to manage your cash needs and minimize your interest cost.

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Frequently Asked Questions

Question	Answer
What happens to my rate when I renew my loan?	At renewal, you may select the pricing option you desire. You control the amount of interest rate variability that best meets your needs.
Can I use your checks anywhere and will I have a problem cashing them?	Our drafts are widely accepted and are similar to business checks. If you ever have a problem using a draft, just call us and we will do whatever is needed to help you.
Is there a minimum draft amount?	Drafts offer a convenient tool to access your loan funds. However, it is not designed to replace a checking account and therefore a minimum of $250 is recommended. However, funds can be withdrawn in lump sums into your business checking account. This allows you to separate your business and personal activities.

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Interest Plans

Interest Type	Index	Repricing Frequency	Maturity Min/Max	Comments/Features
Variable/ 30-day Adjustable >>> rates	GreenStone determines rate.	Monthly	36 months maximum	Revolving and draft options available
Adjustable >>> rates	GreenStone determines rate.	1 year	36 months maximum	At repricing, loan automatically converts to a variable rate. Revolving and draft options available.
Prime Indexed >>> rates	Prime Rate as quoted in the Wall Street Journal	Monthly based on the Prime as of the 10th of the previous month	36 months maximum	Margin to Prime is automatically reset every 12 months. Revolving and draft options available
Fixed >>> rates	GreenStone determines rate.	1 year	12 months	Revolving and draft options available

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