Farm Loan Applications
Alan Blackburn is co-author of the book “Financing Your Farm” published by the Australian Bankers’ Association and the Grain Growers Association in November 2006. Alan has also run training courses for rural bank managers and prepared resource materials, for use by farmers, for the banking industry.
He is experienced in preparing farm loan applications and negotiating with lenders.
Farm Loan Applications and Lendor Negotiations
Lender Requirements
Lenders require loan applications which are supported by a business plan including risk management strategies and budget projections and the assumptions on which the budget is based. Clients who provide this information to lenders generally attract a lower “risk margin” and therefore a lower interest rate.
We work with clients to develop their business plan and budget projections including:
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Examination of options
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Risk management strategies
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Budget projections. These may be annual budgets for an annual review or budget projections over say a 5 year period where the business plan involves farm development over a period.
Developing an Appropriate Lending Package
The loan structure chosen will impact greatly on the cost of borrowing and business flexibility. We work with clients to ensure that they structure a lending package that will best address THEIR needs. This may be quite different from the package suggested by a lender.
Negotiating with Lenders
We assist clients in their negotiations with lenders when requested. This often leads to a very competitive lending package being offered and accepted.
Cash Flow Budget Projections
Cash flow budget projections are a core component in farm business plans and farm loan applications. To prepare cash flow budgets we use our Farm Business Planner software so that you can see the basis for arriving at the figures in your budgets. This provides the basis for explaining budgets to lenders and farm business partners.
Budgets can be saved onto your computer to allow you to make follow up changes if circumstances change. We match the chart of accounts used in preparing budgets, to the chart of accounts in your computerised accounting system. This enables us to place the budget on your computerised accounting system, so you can readily print out budget vs actual reports. This in turn provides an important mechanism for controlling your farm finances.