Seasonal finance is one way for farmers to get ahead on their finance when the harvest comes in and ride out tough seasons when they come.
Banks have a range of products that can help Australian farmers keep the farm up and running. One such product is seasonal finance, a type of loan that works for farmers rather than against them.
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Seasonal finance refers to a loan or a line of credit that is only repaid in the months when you’re earning a return on your harvest. This usually means farmers make fewer repayments per year but those payments are larger in amount.
When farmers are not making repayments, the loan or line of credit serves as an alternative source of cashflow to cover ongoing farm operational expenses.
Seasonal finance also usually allows farmers to make as many additional repayments as they want, to take advantage of seasons when they are receiving income from buyers. Some banks also offer seasonal finance with no early repayment fees, so there is no penalty if a farm is able to pay off the lump sum of their loan at once.
This is a good system for both farmers and banks because it keeps the farm’s finance in sync with its real cashflow patterns, decreasing the risk that the farm might default on the loan.
Seasonal finance can have several benefits:
In 2016, the winner of our 2016 Award for Bank of the Year – Agribusiness, ANZ Bank, is one institution that offers seasonal finance for farmers. Products on offer include an All Seasons Credit Facility, an agribusiness loan with flexible repayments and redraw called Agri Finance, and the Revolving Agri Line, a line of credit with no minimum repayments.
Canstar has researched and rated 7 different providers of agribusiness solutions in Australia. Does your bank offer the features you need? Read the award report and find out if your agribusiness bank measures up.
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This advice is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you. Consider the product disclosure statement and target market determination before making a purchase decision. Canstar provides an information service. It is not a credit provider, and in giving you information about credit products Canstar is not making any suggestion or recommendation to you about a particular credit product. Research provided by Canstar Research AFSL and Australian Credit Licence No. 437917.