Month: November 2025

Have you ever had a conversation with a colleague, mate or even your neighbour, only to hear that they’ve found a better loan rate than you? 

Inconsistency in loan rates in agriculture is something we regularly see. At Sprout Agribusiness, we’re in a unique and fortunate position to be tendering out loans on a regular basis, so we have a sound understanding of where pricing should be. As a general rule, there are three factors that hold significant influence on a bank’s pricing.

1. Pricing that is driven by the cost of funding, that is driven by each bank’s exposure and reliance on deposits, wholesale funding and other funding requirements. 
2. Rates set by the RBA
3. Risk to the bank, and the probability of default, acknowledging that everyone is on a different risk margin. 

While securing a competitive price is a desirable outcome for anyone seeking a new loan for a farming business, it’s crucial to ensure that the bank you choose and the structure of your facility are aligned with your future growth. 

At SproutAg, we believe it’s essential to evaluate your pricing options to ensure your loyalty to your bank isn’t costing you money. When providing clients with a rate, banks add a risk margin to the base rate, which influences what you pay.  Our Bank Loyalty Tax Graph is an estimate of the price of loyalty to your bank. 

Inconsistency in rates also stems further than the three key factors, it also boils down to individual bank managers, and how they’re tracking against their budgets. A manager’s targets, profit and loss or revenue can all affect the rate you’re quoted. As an example, we can have the same client with the same risk grade looking at a 1.5% difference between individual branches within the same bank.

Top tips for how you get the best rate:

1. Be organised and properly tender out your business. Don’t just ask your existing bank for a rate reduction. 
2. Tender out your banking at least every three years. 
3. Prepare and provide the best information possible. To do this, make sure you check out our Finance Ready Check List.

By making the time and effort to get your banking right, you might just see your best pay day yet!

At SproutAg, we’re lucky to work with over 2,000 clients and regularly connect with agribusiness leaders across the country. This gives us unique insight into what really drives growth in family farming businesses.

First and foremost – get aligned.

The most important starting point? Ensuring the directors, partners, or current owners are aligned in their thinking around growth. When alignment isn’t there, the business often works hard but spins in circles. You might have a few extra dollars in the bank in ten years, but your asset base, business performance, or personal goals may not have moved much at all.

How do you know you’re aligned? Ask the simple questions:

• Where do you want to live in ten years?

• How do you want to spend your time?

• What are your key personal and business drivers?

• What role would you like to play in the business going forward?

It’s okay if you’re not 100% sure on all the answers, what matters is understanding each other’s priorities and identifying the common ground. If you’re not on the same page, you won’t move forward in the same direction.

Make the time to have these conversations.

We know how busy farm life is. Between the business, the family, and everything in between, time is short. But if you’re serious about growth, step one is setting aside time away from the day-to-day to work on the business, without distractions.

Then, put numbers around the plan.

Every goal needs a financial engine behind it. Growth often means investment, and opportunity, especially if you’re thinking about the next generation.

Start asking:

• Where do we need to be in 3 years to reach our long-term goals?
  
• What would our first steps be?
  
• What shape does our cash flow need to be in to make this work?
  
• What role do I need to play in that?
  
• Can we actually fund our ideas, or do we need to adjust?

A cashflow forecast is essential. Growth needs cash, and good planning helps ensure you don’t run out when you need it most.

Ongoing improvement is key.

Growth isn’t just about bigger numbers – it often means refining how you run the business, reviewing key processes, and continually improving performance. Regular deep dives into each area of the business are critical to staying on track.

What does a simple growth plan look like?

1. Carve out time to work on the business – regularly.
   
2. Align on your long-term personal and business goals.
   
3. Set 3-year targets to bridge the gap.
   
4. Check the cashflow – can you fund the plan?
   
5. Work on the business – not just in it.
   
6. Review and adjust regularly.
   

And just like that, you’ve built the foundations of a 10-year growth plan.

Need support to make it happen?

At SproutAg, we offer a one-on-one growth program called AgPro, tailored to your unique goals. We walk alongside you to create and implement a personalised strategy that supports real, sustainable growth in both your business and your life.

We’re proud to work with some of the best in the industry and look forward to helping you shape the next decade of your business journey.

Ready to grow? Get in touch with the team at SproutAg.