Financial institution products for farmers

Finance Products for Farmers
Finance Providers

A number of financial institutions such as banks offer types of accounts and finance specifically tailored for farmers. These are essentially the same as standard types but are generally more flexible to allow for the variable circumstances faced by farmers. Unfortunately they target larger operations with high turnovers and so are not suitable for many farms.

Below are listed a number of examples to give you an idea of what is available. It is always worthwhile contacting your bank to see what types of finance they offer. Note that some "farm" accounts and services are little different to standard accounts.

Farm Finance Facility should have some of the following features:

Flexibility to structure your interest payments according to your cash flow, with no set principal reductions for 15 years. You should be allowed to redraw any excess amount you have repaid, up to your approved limit. Generally there is a three year review cycle.
Suitable for farm businesses with strong cash flow and asset base.
Access to loans or overdrafts.

Features to look for on loans include:

greater flexibility to arrange credit to suit your particular circumstances;
general ability to vary the structure at any time without a new application;
split your variable rate term loan into part variable, part fixed interest at any time;
on minimum amounts;
repayments structured to suit your cash flow can be made monthly, quarterly, or half-yearly;
repayments made at anytime without penalty;
sensible minimum and maximum terms.

Some banks like the Commonwealth and the National Australia Banks offer specific products for particular types of farm operations. For example wheat farmers may be able to access upfront finance for wheat delivered to the Australian Wheat Board International (AWBI) distribution pool based on a maximum of 80% of the estimated silo return less costs for your wheat. The distribution pool payments from AWBI are used to repay the loan.

Features should include:

no Bank fees;
funding normally occurs within 10 business days of the bank receiving confirmation from the bulk handler of your wheat delivery;
you can borrow 80%, 70%, 60% or 50% of your estimated silo return adjusted for any premium for quality and less Grain Research & Development Corporation (GRDC) levies and estimated interest rate costs;
a minimum loan amount;
it is to be cleared within fifteen months from date of first funding. Longer-term facilities may be given upon request.

Cotton growers may be able to access a similar Seasonal Finance Facility (secured by a crop) specifically for cotton growers, helping you manage your cash flow during the cotton growing season. It should offer:

Flexibility to finance the planting, management and harvesting of your crop using the value of your crop, rather than just fixed assets;
Complete independence as to where you market your crop and where you purchase your supplies.

Grain Management Account
Growers of other crops may be able to access similar facilities to fund seasonal cropping requirements, automatically pay interest on your surplus harvest proceeds. Key features should let you:

progressively draw down your funds as you need them;
earn competitive returns on your credit funds at a time when you're busy harvesting.

Finance providers

Australia’s major banks all have financial products specifically designed for rural needs. A good selection of finance providers is listed on the inFARMation website (www.infarmation.com.au). Contact information for some of the larger providers are set out below.

Commonwealth Bank
The Commonwealth Bank has a variety of products designed for agribusinesses. These include Grain Advance, the Seasonal Finance Facility for Cotton Growers and Grain Management Accounts.
Phone: 131 998
Web: www.commbank.com.au

Westpac Bank
Westpac offers several products for farm businesses, including the Farm Finance Facility and Farm Management Account.
Phone: Victoria (03) 9608 3683
Queensland (07) 3227 2516
South Australia (08) 8210 3018
Western Australia (08) 9365 5020
New South Wales (0438) 579 096
Northern Territory (08) 8946 1781
Tasmania (03) 6230 4360
Web: www.westpac.com.au

ANZ Bank
ANZ has a range of finance products tailored to rural needs. The bank’s rural website also has a suite of rural finance planners including on-line calculators to help asses the returns from various activities.
Phone: 131 314
Web: http://www.anz.com/australia/rural/ANZ_rural.asp

National Australia Bank
The National Bank provides specialist rural financing options, and its website has tools to help users assess which option best suits their needs. The website also has agribusiness planning tools including a useful template business plan.
Phone: 131 312
Web: http://www.national.com.au/Agribusiness/0,,330,00.html

St George Bank
St George Bank has established Rural and Business Banking Centres in Victoria and New South Wales and they have a variety of financial products for rural producers.
Phone: 133 330
Web: http://www.stgeorge.com.au/rural/default.asp?orc=regional

Suncorp Metway
Suncorp Metway offers a range of agribusiness loan and financial options.
Phone: 131 155
Web: http://suncorp.com.au/suncorp/business/agribusiness.html

Your local credit union is another source of financial services.

Australia also has a number of secondary sources of farm finance. Some of these are listed below.

Wesfarmers Landmark Finance, includes "All-in-One" Seasonal Finance, Term Loans, Deposits and other services.
Phone: Local phone numbers available via phone book or website
Web: http://www.wesfarmerslandmark.com.au/

ARAF Capital Funding (formerly Australian Rural and Agricultural Finance) specialise in rural, commercial and non-conforming investment housing.
Web: http://www.araf.com.au/

Industrial and Commercial Finance offers innovative and cost effective solutions for a range of users including agricultural producers.
Phone (NSW): 02 9922 3888
Phone (QLD): 07 5592 4066
Web: http://www.icf.com.au/

Robert Norman and Associates specialise in non-conforming loans – those applications that do not meet the traditional lenders criteria – including farm finance.
Phone: 03 9815 2800
Web: http://www.rna.com.au/

Rural Finance is a Victorian specialist rural leader, providing financial products and services to Victorian primary producers and rural industries.
Web: http://www.ruralfinance.com.au/