Top reasons why farmers turn to FarmCap for private agricultural funding

In our experience, we have seen first-hand all of these lending scenarios and valid reasons why farmers have required much needed private credit for a short-term period.

1. A farmer has achieved below average crop yields over recent seasons due to external weather events outside a farmers control i.e. excessively dry or wet conditions during key growing periods impacting cash flows and a borrower’s ability to service their current loan and are likely in default. As a result, the bank has stopped lending any more funds.

2. A bank has asked the borrower to ‘exit’ their current loan and seek refinance or commenced farm debt mediation with the intention of commencing recovery action.

3. A farmer requires working capital (likely in addition to a refinance) to pay outstanding creditors or ATO debt that are in arrears and avoid further action.

4. A farmer requires additional working capital for this upcoming season’s crop and farming inputs on current or expanded plantings/arable areas as they are unable to access additional credit from their current lender or input suppliers at all or in a timely manner.

5. A farmer is seeking a refinance with a non-bank lender whose loan term is expiring and wants to avoid default interest, fees, penalties and risk of recovery action and buy more time to facilitate an orderly sale of a land asset and avoid a forced sale scenario.

6. A farmer wants to consolidate debts into an ‘interest only’, term loan facility to take the pressure off cash flow, recapitalise and restabilise.

7. A farmer is faced with a dispute, inhibiting a borrower’s ability to borrower, refinance or simply run an efficient farming operation. This may involve a divorce pending financial settlement requiring funds to pay out an ex-spouse, a partnership dispute with parties refusing to sign documents, funds required to payout a partner, or a commercial legal dispute on foot.

8. A farmer requires funding quickly to take advantage of a buying opportunity to settle on a farmland purchase to expand or buy out a family member as part of an estate settlement. A young farmer may also want to acquire farm property off a family member but lack the trading history.

9. A farmer requires a ‘small’ loan (commonly below $1m) which is not large enough to capture the interest or attention of a ‘real person’ within a bank in a timely manner nor be able to provide the ‘TLC’ the transaction requires.

10. Banks may be averse to lending to farms with commodity specific or geographic risk at a particular time i.e. vineyards with geopolitical risk and trade tariffs, dairy during a downturn or a specialized commodity with limited alternate uses of land. A bank or non-bank may also be restricted with funding allocation within a specific farm sector or region.

11. A farmer may have a complex structure or farming operation requiring a high level of expertise to understand the business and manage risk.

FarmCap maintains the skill, expertise and capability to provide funding across all of these lending scenarios providing a much-needed solution for Aussie farmers.