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Agribusiness loans
Agribusiness loans can be used to buy livestock, equipment, property or boost cash flow.
Loan Types
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If you need funding to help finance your farming operation, an agribusiness loan could help. Agribusiness loans have similar criteria to regular business loans. You can borrow more and lock in cheaper rates if you're able to offer an asset as security for the loan.
What is agribusiness?
Agribusiness refers to any business that earns most or all of its revenue from agriculture, and this umbrella term covers a diverse range of farming operations. It can include everything from small family-owned farms to much larger commercial operations.
What is an agribusiness loan?
An agribusiness loan is more or less the same as an ordinary business loan, but with the key difference that it provides funds to cover the finance needs of agriculture businesses. You can use an agribusiness loan to purchase a property, buy new machinery and equipment, upgrade breeding stock, overcome cash flow shortages and fulfil a range of other funding needs. Australian banks and financial institutions also offer a range of other agribusiness banking solutions, including savings accounts, farm management accounts and risk management services.
Heritage Bank Fully Drawn Business Loan
Heritage Bank Fully Drawn Business Loan
- Fixed and variable rate options
- Redraw facility upon request
- Penalty-free extra repayments
100% confidential application
Heritage Bank Fully Drawn Business Loan
Borrow from $20,000 and use to finance large business purchases and managing long-term cash flow. Secure with either a residential or non-residential property.
- Loan security: Secured
- Upfront fee: Application fee is available upon application
- Minimum loan amount: $20,000
- Maximum loan amount:
- Minimum loan term: 1 year
- Maximum loan term: 25 years
Business loans you can apply for agribusinesses
How can a agribusiness loan help?
There are many situations when a business loan can provide the finance your agriculture business needs, such as:
- If you need to buy livestock. Livestock loans allow you to purchase more stock, upgrade your breeding stock and cover the cost of animal health needs.
- If you need to buy new vehicles or equipment. From equipment finance to loans to help you buy new vehicles to manage your property, there are several lenders and finance options to choose from.
- If you need to buy a property. If you want to purchase a property to grow and improve your business, or if you want to improve farm buildings and facilities, you may be able to access the funding you need through an agribusiness term loan.
- If you need to solve a cash flow problem. Seasonal cash flow fluctuations can cause difficulties for many farmers, so a overdraft facility or line of credit could provide the funds you need to solve any short-term problems. Some lenders also offer special seasonal finance products, allowing you to borrow money during seasonal lows and then repay it during the time of year when your farm is turning a profit, for example during harvest season.
Benefits of a business loan for agribusinesses
Agribusiness loans offer several benefits to Australian farmers, including:
- Finance for a wide range of needs. Whether you're solving a short-term cash flow problem, investing in a plan for long-term growth or anything in between, there are agribusiness loan options that can provide the funding you need.
- Flexible loan features. Flexible repayment schedules, fixed or variable rates, redraw facilities and offset accounts are just a few of the features available on some agribusiness loans, allowing you to tailor a loan to suit your needs.
- Improve efficiency. Whether you need new equipment to help you work faster, more employees to improve productivity, or funds to invest in updating your work processes, agribusiness loans can help you turn your farm into a more efficient operation.
- Peace of mind. Agribusiness loans are specifically designed to suit the requirements of Australian farmers. This means you can access the funds you need to help your farm survive and grow, and that repayments can be tailored to match the unique income cycle experienced by many agribusiness operators.
Need to overcome cash flow shortages?
If your business needs to overcome cash flow shortages due to a few outstanding invoices, then invoice financing could be an option. It's a type of business loan that comes with reduced risk, no asset requirements or interest payments.
Compare invoice financing options below.
How to compare agribusiness loans
Keep the following factors in mind when comparing agribusiness loans for your farming operation:
- Interest rates. Compare interest rates from a number of lenders to work out what your regular repayment amounts will be. It's also a good idea to use a business loan calculator to calculate how much the loan will cost in total when it has been fully repaid.
- Loan amounts. Check the minimum and maximum loan amounts imposed by a lender to determine whether a particular loan product is suitable for your farming needs.
- Loan fees. Make sure you're aware of any fees attached to a loan. This could not only include an upfront application or establishment fee, but potentially also ongoing monthly or annual charges.
- Repayment options. Consider the maximum loan term when working out how long you will have to repay the money you borrow. Some lenders will also offer flexible repayment options, such as the ability to make interest-only repayments for a set period or to only make repayments during the months of the year when your farm earns a return from your harvest.
- Bundling options. Some banks will allow you to bundle multiple agribusiness banking products together into one package to save on fees. For example, you may be able to combine an agribusiness loan with an everyday farm management account.
How can I increase my chances of being approved?
There are a few simple things you can do to boost the chances of your agribusiness loan application being approved. Make sure to:
- Understand your loan options. There are myriad agribusiness finance options available to suit the varied needs of Australian farmers, so it's important that you research all the different loans available. This will help you decide on the right type of finance for your farm.
- Compare lenders and loans. Once you know the type of loan you need, compare multiple business loan products across a variety of lenders. Look at interest rates, fees, repayment options and other features to see which loan offers the best value for money.
- Know the eligibility criteria. Read all the fine print associated with the loan to ensure that you satisfy all the relevant eligibility criteria. However, it's worth mentioning that, due to the varied nature of farms included under the term agribusiness, applications for agribusiness loans are usually assessed on a case-by-case basis.
- Put together a comprehensive application. Make sure any application you submit addresses all the criteria the lender attaches to the loan. A good credit rating will greatly improve your chances of success, while you'll also need to provide bank statements, tax returns and cash flow projections to prove your income.
- Ask for expert advice if needed. Feeling confused or overwhelmed by the agribusiness loans available? Ask your accountant or an experienced finance broker for advice on the right agribusiness loan for your needs.
FAQs about agribusiness loans
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