Understanding a rural lender’s perspective: Tips to help farmers get finance ready

30 March 2021

Primary producers applying for a loan from their commercial bank or a government lender have been given an insight into ‘understanding a lender’s perspective’ and tips for applying.

QRIDA North and West Regional Delivery Manager Vern Ezzy shared the tips as part of Future Beef’s ‘Understanding a Lender’s Perspective’ webinar series in March, aimed at helping primary producers prepare their finance applications.

Vern’s tips for primary producers covered talking to their lender early, considering the cash flow budget and statement of position, understanding the business plan and experience you bring to the table plus benchmarking your business.

Tips for applying for finance include:

1. Talk early. This gives you and your lender some lead time to analyse and process your finance request and discuss funding options.
2. Cash flow. Consider your cash flow budget or incomings and outgoings today and what they are expected to be in the future, year in and year out. They need to be realistic, accurate and based on historical performance.
3. What’s your Statement of Position (SOP)? Examine your SOP or balance sheet showing your assets and liabilities. What was your position 10 years ago and what do you expect it to be in 10 years’ time?
4. What do you bring to the table? In terms of your experience and equity – your lender will be considering what capital are you providing and what’s your plan to achieve your business goals?
5. Benchmark your business. How is your primary production business performing compared to industry benchmarks? For example, for grazing – gross margins, cost of production per kg beef, production per animal equivalent, breeder fertility and herd mortalities.

Mr Ezzy outlined the range of low interest loans available to Queensland primary producers through QRIDA.

First Start Loans up to $2 million can support aspiring producers ready to ready to purchase their first block of land, carry out the family succession plan or achieve standalone viability.

Sustainability Loans up to $1.3 million are available to existing farming businesses to invest in the latest infrastructure to create a viable future including activities that improve farming systems, natural resource management and financial sustainability.

Mr Ezzy said it was important producers did not self-assess but get in touch with QRIDA for details about eligibility and assistance available.

QRIDA has eleven (11) Regional Area Managers located around Queensland including in Cloncurry, Townsville, Innisfail, Mackay, Rockhampton, Bundaberg, Kingaroy, Emerald (with an office in Longreach), Roma, Toowoomba and Brisbane who are available to meet producers on farm to speak about their options.

For more information or to get in touch with a Regional Area Manager, Freecall 1800 623 946, or search for your local contact via postcode.

The Lender Ready webinar series was presented by Gordon Stone, director of the Agr-Business Development Institute (ABDI) and hosted by Future Beef.

Note: QRIDA does not provide financial advice and these tips do not represent financial advice.