The loan company procures its funds largely from the money centers by the process of rediscounting the cattle paper, though some of the loans are rediscounted locally. The company forwards to the bank the note, together with the mortgage and sometimes copies of the inspector's report and the financial statement of the maker. It also indorses the note and thus guarantees its payment, the value of the guaranty depending on the character of the company and on its capital, and the buyer of the paper looks rather to the loan company than to the cattleman borrower. The paper is largely sold to eastern banks. The loan companies establish affiliations with strong banks that are in the market for commercial paper, and take all precautions to develop a good reputation, so that their offerings will be readily taken. By this process of rediscounting the loan company subjects itself to a contingent liability as guarantor to a volume of paper much larger than its capital.