Agriculture Finance

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, updated on August 28th, 2023       

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Flexible agricultural loans and leases

Running any kind of agricultural business demands more than just water, sunlight, and working from dawn ‘til dusk. When your situation changes, you need access to reliable, flexible finance solutions, too – and that’s where Savvy can help. We assist farmers with buying and leasing assets, vehicles, and machinery, accessing loans for livestock, and even unlocking the value of their sales with invoice finance.

Finance tailored to your agribusiness

At Savvy, we know that for farmers, timing is everything. That means having access to the equipment, labour, and machinery you need when conditions are right – not when the weather or season has changed. Our consultants understand the needs of our nation’s growers and the unique challenges they face. Whatever your operation, no matter how small or big – our expert brokers will find the right agribusiness loans for you and then help you put one quickly in place. Get started with a free, no-obligation quote today.

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See how we can help you with your agriculture finance

Got a question about your agriculture loan?

What can I use agribusiness finance for?

Savvy’s lender partners offer loans and leases for agricultural machinery and equipment, livestock, invoice financing, and more. Talk to us today about your specific borrowing needs.

I run an agricultural business that needs specialised plant. Can I finance it?

Yes – Savvy helps all types of farms and agribusinesses find flexible and affordable loans for all types of plant, from tractors to haymakers to skid steer loaders and more.

My business is new. Can I apply for equipment finance?

Yes – We have helped many startups and micro-businesses find the business equipment finance that they require. You get the right service and the right products, every time.

I want to lease equipment, but have the option to buy – is that possible?

Yes – finance leases give you the option to buy the equipment outright at the end of the lease term. Ask your consultant to find out how you can achieve your business goals with a finance lease.

Can I claim tax and other deductions back?

Yes – most agribusiness equipment leases and loans allow for GST and interest claims back on your tax. Ask one of our consultants for guidance.

I run a seasonal agribusiness. Can I apply for agricultural finance?

Yes – many of the lenders we deal with offer products with flexible repayment terms that cater to seasonal and harvest-based agribusiness.

Can I access finance with bad credit history?

Past problems won’t necessarily prevent you from accessing farm finance, and our expert consultants can source bad credit agribusiness loans.

How does low doc agribusiness finance work?

Low doc rural loans can be the ideal solution if you don’t have up to date financials ready. Specialist lenders consider alternative documentation and guarantees. Talk to one of our expert agribusiness finance consultants today, and get where you need to be faster.

Agriculture finance explained

How does an asset finance lease work?

Finance leases come with repayment options between one and five years. With a finance lease, the residual payment gets based on the length of the lease, so it’s fixed. When the lease term finishes, you can choose to purchase the equipment, machinery, or vehicle, opt for refinancing the residual amount, or for selling up and starting a new lease for brand-new machines or vehicles.   

  • The entire amount of repayments is tax-deductible
  • Finance amounts for machines, tools, other assets, and vehicles get based on the GST-free purchase price

What is a chattel mortgage?

Chattel mortgage finance is a very popular option with agribusiness loan customers for several reasons. It’s a low-cost finance solution because it’s a form of secured loan – so interest rates are relatively low. Chattel mortgages also offer some distinct GST advantages and run between one and seven years, depending on your requirements. Terms run between one and seven years, and the end-of-lease options are identical to a finance lease.

  • The interest portion of repayments is tax-deductible
  • You claim all the purchase price GST back when your next business activity statement gets filed
  • There’s zero GST on repayments or any residual amount

What’s an operating lease?

An operating lease is very similar to a long-term rental agreement in practice. Terms run between one and five years, and while they have a lot in common with finance leases, they’re different in a few ways. Operating leases are a fully maintained finance solution, meaning you don’t have the responsibility or costs for administration and servicing vehicles and machines. You can bundle as much of the insurance and maintenance as you want into your regular lease payments to the lender. Operating lease lenders also take on all the ownership and sales risks because, at the end of the agreed term, you just hand the machine or vehicle back. They’re an excellent option if you want to upgrade frequently.

  • All operating lease payments are tax-deductible 
  • The cost of the lease gets based on the ex-GST price of the equipment 

More about agricultural finance

Buying new vs. used agricultural machinery

Keeping a farm operating requires a lot of work and a lot of capital. Buying used agricultural machinery such as tractor, may be a viable option, especially if you’re facing a bigger than expected harvest. Depreciation may occur faster, but it will get the job done. Buying new means high residual value in your asset, and lower maintenance costs as parts and machinery is factory fresh. If you decide to rotate crops or move into different commodities, you can sell for more.

Leasing equipment vs. buying

A major decision for any farmer or agribusiness manager is to lease or buy farm equipment. Buying creates an asset on the books, which can count towards your profits. You can also claim depreciation, tax and other benefits. However, if your farm or agribusiness needs more flexibility, operating or finance leases may be preferable. This gives you the opportunity to switch out existing equipment within a given time frame, so you’re always using new or near-new equipment.

Agribusiness loans – how they differ

In contrast to other types of commercial loans, Agribusiness is often dependent on seasonal income, so banks and lenders accommodate repayments when cash flow is better – around harvest time. Terms can vary from three months up to thirty years; especially when some equipment can cost six to seven figures. One can separate the loan into interest only (with a balloon payment due at term) or principal and interest, like most other loans. Some loans also come with a redraw facility.

Buying agriculture equipment after lease

Many agribusinesses lease their equipment with an operating or finance lease as it suits their aims and method of operation. However, once a lease term concludes, a farm or agribusiness has the option to buy their equipment outright, if it suits their financial position and goals. The usual method is to pay out the residual value of the equipment leased. Though this is a lump sum, your business can finance this using a variety of commercial agribusiness loan products.

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