The Handshake Loan

When Character Mattered More Than Credit Scores

There’s a quiet story, told in the worn floorboards of old prairie town banks, about a time when a person’s word was their bond and their character was their collateral. You can almost hear it in the imagined click of the heavy oak door and the low hum of a ceiling fan stirring the summer air.

This was the world of the handshake loan, a form of lending that feels almost mythical in today’s whirlwind of instant credit scores and algorithmic approvals.

To revisit this era is not merely to indulge in nostalgia; it is to conduct an essential audit of what we have gained and what we have irrevocably lost.

This wasn’t just a financial transaction; it was a deeply personal and social contract, a promise woven into the very fabric of a community, and its unraveling reveals good truths about the moral and communal shifts in our modern relationship with money.

Before the reign of FICO, TransUnion, and Equifax, the path to securing capital led to a conversation, not a web form. Imagine a farmer, his hands calloused from work and his face lined by the sun and worry, sitting across a wide wooden desk from his local banker. The loan he sought wasn’t for a vacation or a luxury, but for seed and fertilizer; an advance against a harvest that was still just a prayer subject to the whims of rain and frost.

The banker, a man who likely knew the farmer’s father and grandfather, didn’t first ask for a credit report, for there was no such thing. Instead, the conversation would drift toward family, the health of the community, and the feeling about the coming season. This discussion was the true underwriting process, a sophisticated, if unwritten, algorithm of its own.