If you’re struggling to keep on top of your agribusiness finances, you’re not alone.
Your bank has experienced agribusiness specialists ready to help.
It’s important to be as open and realistic as possible about your financial position.
The sooner you get in touch, the sooner you can find help.
You should also speak with a Rural Financial Counsellor (1300 771 741) who can provide you with free, confidential planning and support to help make better informed financial decisions for you and your business.
What are some of my options?
Your bank will work on a case-by-case basis with you to consider possible solutions if your finances have been hit by drought, natural disasters, or other recent events beyond your control.
Depending on your circumstances and your bank, there may be a number of options your bank could offer to help your business through these difficult times. These include:
- Waiving fees and charges, including break costs on early redemption of Farm Management Deposits
- Debt consolidation to help make repayments more manageable
- Offering additional finance to help cover short term cash flow shortages such as overdraft
- Talk to your bank about options to reduce repayments or to restructure your loan
- A deferral of scheduled principal loan repayments.
You should also check any of these options against your budget to ensure they deliver the best outcome.
It’s also a good idea to properly understand your business’ true financial position and have this information with you when you speak to your bank.
Your bank may ask you for relevant information depending on the circumstances. For example, an updated statement of position or a valuation may be required, so they can better understand how they may be able to help with the potential options available.
I really can’t make repayments on my loan
Stay in contact with your bank and they will work with you to try to consider possible options to help keep you in business.
Your bank and other advisors can help you consider all aspects of your farm or agribusiness including looking at your business plan, cash flow, inventory, profit projections, debtors and creditors to consider the ongoing viability of your operation. Your bank will then talk with you about what assistance they could provide to support your business through the difficult period.
If you and your bank agree on a new arrangement for your loan, your bank will tell you about the changed arrangements in writing. These will include the new repayments you will need to make and what will happen at the end of the new arrangement. Your bank will also be able to advise you about whether accepting the proposed new arrangement will have any adverse consequences in relation to banking services or your credit history.
It’s a good idea that you stay in touch with your bank and share all relevant information during this time.
If your bank doesn’t allow you to change the terms of your loan, they need to tell you why in writing.
You can also speak with a Rural Financial Counsellor (1300 771 741) about your situation and available options.
You could seek Farm Debt Mediation
Farm debt mediation (FDM) is a structured negotiation process between a farmer and their lender.
FDM is available if you have concerns about the ability to meet your loan obligations. It may be initiated by you or the bank in certain circumstances. The mediator works with both parties to reach an agreement on current financial arrangements, and the best way forward.
FDM legislation is in place in New South Wales, Victoria, South Australia and Queensland and a voluntary scheme is in place in Western Australia. Rural Financial Counsellors are also able to support farmers through the FDM process.
Take care of yourself and seek help with your decisions
Please reach out if you are feeling stressed about your financial situation. Rural Financial Counselling (1300 771 741) services can provide you with free, confidential planning and support to help make better informed financial decisions for you and your business.
Alternatively, you can speak with an accountant or professional adviser.
Will this affect my credit rating?
Commercial credit reports do not currently include monthly repayment information on business loans. Therefore, they will not show if a business has been granted a loan repayment deferral by a bank during COVID-19.
Sometimes your individual credit report may include commercial information related to your business or somebody else’s business, for example, where a loan is taken out by a company and you have provided a ‘guarantee’. If you have deferred a business loan due to COVID, then the repayment history on your personal credit report won’t be negatively impacted as a result of deferring your repayments.
Your bank will tell you if they make a report about a default to a credit reporting body.