Written by 
- The Savvy Promise
At Savvy, our mission is to empower you to make informed financial choices. While we maintain stringent editorial standards, this article may include mentions of products offered by our partners. Here’s how we generate income.
Know when to tighten your belt
With 65% of Australia's farming produce going to overseas markets, it's clear to see that the market place plays a vital role in most farmers revenue. It helps to have an emergency buffer in place for when the market takes a slump or when you don’t hit the target. This can be done by tracking every dollar and checking where you can possibly cut back to add to the emergency fund. This may seem tedious at first, but it will come in handy when stuck to consistently.
Estimating your expenses
Having a budget in place is one of the key components to managing your farm. You may not be able to budget for every expense, which is why the first point is vital. Knowing the expenses that come with producing your product can ensure that you take out a commercial loan or any financing that can adequately cover your expenses. When estimating expenses keep in mind to account for depreciation, maintenance, repairs, marketing, variable and fixed costs that are applicable to your business.
Make financial decisions that align with your cash flow
Whether you are planning on taking out farm finance or using your own capital, it is vital to make financial decisions that help you maximise your cash flow. This can prevent your business from falling into a debt trap. According to the Royal Commission, Australian farms owed a total of $71.7 billion in rural debt. Broadacre farm debt stood at an average of $616,900 per farm which was an increase from previous years. If you are planning on taking out a loan it is important to check that you will be able to comfortably meet its repayments and that it works with your budget.
Call in the professionals
There are many moving components that come with running a farm. This can make things difficult to manage, especially when it comes to the financial aspect of your farm. Hiring an account can be a good investment when it comes to tracking your farms' finances if you do not already have one. Not only will they be able to tell you about the potential tax benefits that your business can get, but they can also highlight expenses that you may have overlooked.
Make smart investments
Whether you are choosing the right equipment or financing that comes with flexible features that allows you to run your business efficiently at an affordable, it pays to compare. After all, this is an investment and you would want to get the most out of it. Speaking to a financial advisor or a broker can help find a tailor-made solution that will work for you and your farm.
Did you find this page helpful?
This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.
The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.
Approval for commercial loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.
The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.
