Healthy, high-quality livestock are the backbone of any Aussie farm, and keeping your operation profitable means keeping your herd in top shape.
Whether you're looking to invest in new breeding stock or cover those inevitable vet bills, sometimes you need a little financial muscle.
That's where a livestock loan comes in - the can help to keep your farm running smoothly without breaking the bank.
A livestock loan usually refers to a loan to help Australian farmers improve the quality of their breeding stock. This type of financing gives farmers the funds they need to do the following:
However, the term livestock loan (or livestock finance) can also refer to an agriculture loan where you can use your livestock as collateral for the loan. You can use the borrowed funds to buy more livestock, to refinance an existing loan or to cover the cost of other farm-related expenses.
Livestock loans are available with fixed or variable interest rates and you are able to structure repayments in a way that reduces cash-flow pressure. In most cases, interest on this type of finance is capitalised (added to the loan amount), and you won’t need to repay the loan until the stock you purchase are sold or refinanced.
Loan terms typically range from a few months up to a few years.
A business loan can allow you access to the funds you need to improve your stock numbers, increase the quality of your breeding stock and boost the profitability of your agricultural enterprise. Livestock loans are available from a limited range of Australian lenders, most of which offer specialist products to suit the agriculture sector.
However, there are several other general business loan options available to suit the finance needs of Australian farmers. From lines of credit and overdrafts to equipment finance and specifically tailored farm loans, there is plenty of choice available. To make sense of the loan options available and to work out which one is right for your needs, you may want to speak to a broker who specialises in agribusiness banking products.
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The following are some of the reasons why you should look at a livestock loan:
There are several important factors to consider when comparing livestock loans:
Whether you’re applying for a livestock loan or another type of business loan for your farm, there are a few simple things you can do to improve the chances of your loan application being approved:
If you are struggling to manage your cash flow and have a few outstanding invoices, invoice financing can be an option. It's a type of business loan that comes with reduced risk, no asset requirements or interest payments.
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