Category: news

Adoption of agricultural technology (ag tech) in rural Australia is growing, driven by the need to manage climate variability, rising input costs, and labour shortages.  While over 80% of producers now use or consider using digital tools like farm management software, remote sensors, digital fencing, drones and so on, the actual uptake is slower than first thought.

1. Key factors impacting uptake of Ag Tech

Telecommunications connectivity: This issue has recently been clearly evidenced by the Telstra outage, where even regional public transportation was reduced to a standstill. Widespread digital inclusion remains low in rural and remote Australia. Many areas suffer from slow, patchy, or unavailable 4G/5G and broadband services. Further to this, technologies relying on cloud connectivity and real-time data struggle without reliable & consistent infrastructure. Telecommunications outages can leave virtual fencing technologies in limbo, cows stuck in small strips of paddock until manually released, or GPS-guided tractors and headers missing the canola.

Economic factors: The often-high initial capital required by many ag-tech offerings is currently prohibitive for many small-to-medium farming enterprises. The return on investment is often unclear, both in terms of economic benefit and the timeframe for achieving it. However, there is a shortage of quantitative case studies that can demonstrate the impact of each technology, which would assist farm businesses in understanding return on investment. This is also a key consideration when evaluating financing options, where lenders and borrowers alike need confidence in expected return and timeframe for realisation. A further issue is the development of the perceived ‘value’ of these options. Ag-tech options must offer an improved value proposition that aligns with trusted farming methods.

Skill shortage: Owning and operating new and advanced systems requires a particular skill set, as well as available, local support and labour resources. Often located in regional or remote areas, farming businesses that have adopted ag tech may have made significant changes to their operating model. As a result, a lack of technical skills or support can disrupt machinery operations during critical seasonal periods and may also contribute to animal welfare and production issues with potentially long-lasting consequences.

Ownership & privacy: For many ag-tech solutions, ownership and control of key elements—including software, platforms and data—remain with the provider. Combined with growing concerns around privacy and data security, this has led some producers to hesitate to adopt these technologies, as they have genuine concerns about the ownership, use, and control of their farm data.

2. What can be done to assist?

Connectivity divides: Clearly, given the recent issues, investment in regional connectivity infrastructure must meet that of metropolitan areas, if not exceed them. Given the need to produce more food from a shrinking arable land base, the development and adoption of ag tech must continue to accelerate. Equally important is connectivity between producers, which enables the sharing of knowledge, experiences and practical insights, helping farmers better understand available technologies and how they perform in real-world farming operations.

Financial assistance: Federal and state government initiatives, along with jurisdiction-specific funding programs, must continue to support and subsidise the adoption of ag-tech technologies. Financial institutions must also continue to play a role in advancing uptake of ag-tech, with new products and an appetite to expand regional food production capacity. This will give farmers the ability to move forward with adoption in a landscape less vulnerable to cost-of-investment, in addition to changes in cost of inputs, commodity prices, connectivity outages, and assist in offsetting the unknown and, sometimes, unmeasurable return-on-investment. Ag tech providers need to provide local, transparent return-on-investment case studies to build farmer trust. They also need to play a role in educating farmers on how to measure quantitative and qualitative impacts to their business and help bridge the case study gap.

Improve digital literacy and local support: Farmers are generally more likely to adopt new technologies based on recommendations from trusted neighbours, local agronomists and business advisers than through direct marketing. As such, there is a need for state-backed programs that provide integrated onboarding, practical training and support to improve digital capability across regional communities. Equally important is fostering a culture that encourages innovation and technology adoption.

Farmers and farming businesses are often highly progressive, intelligent and self-motivated, with a long history of embracing new ideas and adapting to changing conditions. Their focus is typically on ensuring their businesses remain productive, sustainable and resilient over the long term. To support this, it is essential that regional connectivity, infrastructure and support systems continue to be strengthened and expanded. Creating an environment that enables innovation will be critical to accelerating the development of ag-tech and increasing its adoption by producers.

Sprout Agribusiness has completed the strategic acquisition of Mainland Finance, a respected regional equipment finance business, strengthening its national service offering while supporting a long-term succession plan for the Mainland Finance business.

As part of the acquisition, Mainland Finance will transition to Sprout Equipment Finance, further strengthening Sprout Agribusiness’s equipment finance capability and reinforcing its commitment to delivering independent, relationship-driven finance solutions to farming families and agribusinesses across Australia.

Sprout Agribusiness CEO Troy Constance said the acquisition was a natural fit for both businesses.

“Mainland Finance has built a trusted reputation in regional Australia, and their client-first approach aligns closely with the way we do business at Sprout Agribusiness,” Mr Constance said.

“This acquisition strengthens our equipment finance capability while broadening the solutions available to clients. It also provides a structured and practical succession pathway for the Mainland Finance business, enabling a smooth transition for its directors as they begin stepping back from day-to-day operations.”

Mainland Finance Founding Director Harold Clapham said partnering with Sprout Agribusiness provided confidence in the future of the business, its staff and clients.

“Succession planning is about ensuring continuity, for the business, the people within it and the clients it supports. Sprout understands that process because it’s part of what they do every day with farming families and regional businesses,” Mr Clapham said.

“This acquisition allows us to gradually step back knowing the business and our clients will continue to be supported, while also gaining access to a broader range of finance and advisory services.”

Operating as Sprout Equipment Finance, the business will provide clients with expanded capability across equipment finance, supported by Sprout Agribusiness’s growing national footprint.

Importantly, clients will continue to work with the same trusted team, ensuring continuity of the long-standing relationships and personalised service that have been built over many years.

Both businesses share a strong commitment to regional Australia, with a focus on long-term relationships, practical solutions and supporting the future of family-run agribusinesses.

There is more noise than usual in the business environment.

Across regional Australia, businesses are facing a combination of rising costs, increased uncertainty and changing market conditions. While none of these challenges are necessarily new on their own, the cumulative impact is placing greater pressure on cashflow and working capital requirements than many businesses have experienced in recent years.

Some of the key factors contributing to this include:

• – Higher fuel and fertiliser costs.
• – Rising wages and labour expenses.
• – Increased machinery and technology costs.
• – Supply chain disruptions and delays.
• – Tax and regulatory changes.
• – Proposed Capital Gains Tax (CGT) changes.
• – Political and economic uncertainty.
• – Higher livestock replacement costs than many producers initially budgeted for.

The reality is that most businesses now require more working capital simply to maintain the same level of operations.

What Does This Mean for Business Owners?

At SproutAg, we are seeing a significant increase in working capital requirements across our client base, from Goondiwindi through to Adelaide.

In many cases, businesses are not necessarily borrowing more because they are expanding. Rather, they are requiring larger operating facilities because the cost of running their business has increased and there is less room for error when unexpected events occur.

At the same time, lenders are experiencing higher demand for working capital reviews and facility increases, resulting in longer turnaround times for approvals.

This means businesses need to be thinking further ahead than they may have in the past.

One of the most important lessons from the last few years is that profitability and cashflow are not the same thing. A profitable business can still experience cashflow pressure if input costs rise unexpectedly, seasonal conditions change, markets soften, or a major capital expense arises.

Businesses that maintain a healthy cash buffer are often better positioned to:

• – Manage unexpected cost increases.
• – Navigate seasonal volatility and market fluctuations.
• – Take advantage of growth opportunities when they arise.
• – Avoid making reactive decisions under financial pressure.
• – Maintain stronger relationships with lenders and suppliers.

Put simply, working capital is no longer just about funding day-to-day operations. It is about creating resilience within the business.

You don’t have the option of stopping business activity when costs increase or conditions become uncertain. Ensuring adequate access to cash, whether through retained funds or available lending facilities, is one of the most important steps you can take to protect your business.

For many businesses, this may mean carrying more cash in operating accounts or maintaining higher lending limits than previously considered necessary.

Five Tips to Strengthen Your Cash Position

1. Regularly Update Your Cashflow Forecast

Develop realistic cashflow projections and revisit them regularly as conditions change. Small changes in costs can have a significant impact over a 12-month period.

2. Maintain a Rolling Forecast

A rolling 12-month forecast allows you to identify potential pressure points early and make informed decisions before they become problems.

3. Build in a Contingency Buffer

Allow for higher costs, delayed income, or unforeseen events. Budgets that are too optimistic can quickly become outdated.

4. Review Lending Facilities Before You Need Them

If you believe additional working capital may be required, start discussions with your bank or funder early. Securing funding is generally easier before pressure emerges.

5. Review Profitability Across the Business

As we approach the 2027 financial year, assess each enterprise, investment and expense category to ensure it continues to deliver value and remains commercially viable.

The businesses that will be best positioned over the coming years are not necessarily those with the highest turnover or the fastest growth. They will be the businesses that maintain strong liquidity, plan ahead and retain the flexibility to respond to changing conditions.

In an environment where costs, regulation and uncertainty continue to evolve, preserving access to cash and working capital remains one of the most important risk management strategies available to any business.

Weathering More Than the Seasons: Mental Health on the Land

There’s a quiet strength that comes with life on the land. Farmers are problem-solvers, risk-takers, and stewards of something far bigger than themselves. But behind that resilience is a reality that doesn’t get talked about enough—the mental and emotional toll of farming.

Unlike many professions, farming doesn’t operate within predictable boundaries. It is shaped by forces largely outside of one’s control: rainfall (or lack of it), commodity prices, global markets, biosecurity threats, and shifting policy landscapes. One good season can be followed by two tough ones. A lifetime of work can feel like it hinges on a few weeks of weather.

Right now, that uncertainty is being amplified.

Across Australia, farmers are facing a tightening economic environment. Input costs—particularly fuel and fertiliser—have risen sharply, driven by global supply disruptions and geopolitical tensions. In some cases, fertiliser prices have surged dramatically, forcing farmers to either cut back usage or rethink cropping programs altogether.

At the same time, commodity prices in key sectors are softening, meaning the cost of production is increasing while returns are not keeping pace. The result is a squeeze on margins that is becoming increasingly difficult to absorb.

Layered on top of this is climate variability—drought in one season, floods in another—and the constant pressure of making decisions without certainty.

That constant uncertainty doesn’t just impact the business—it impacts the person.

The Invisible Load

For many in agriculture, stress isn’t just occasional—it’s cyclical. But in the current environment, it’s also compounding.

Rising debt levels, increasing land values, higher operating costs, and tighter cash flow are all adding pressure. Even strong, well-run businesses are feeling it. The margin for error is shrinking, and decisions carry more weight than ever before.

And then there’s the mental load of it all—the constant calculations, the “what ifs,” the responsibility not just to a business, but to a family, a legacy, and often a future generation.

What makes this even more complex is the isolation. Rural communities are tight-knit, but distances are vast, and access to services—especially mental health support—can be limited.

And farming is not just a job—it’s an identity. When things go wrong, it can feel deeply personal.

Why It Often Goes Unspoken

Despite these pressures, many farmers are reluctant to speak openly about mental health. There’s a culture of toughness in agriculture—getting on with the job, pushing through, not complaining.

But when economic pressure builds, that silence can become dangerous.

Recognising the Early Signs

Early warning signs might include:

– Withdrawal from social interactions or community activities
– Changes in mood—irritability, frustration, or persistent worry
– Difficulty sleeping or constant fatigue
– Loss of motivation or enjoyment in the work
– Increased reliance on alcohol or unhealthy coping mechanisms
– Talking about feeling overwhelmed, financially trapped, or hopeless

The Power of a Conversation

Sometimes, the most powerful support you can offer is simply being there. What matters is showing genuine care, listening without judgment, and creating space for someone to talk.

A simple “How are you going, really?” can open the door.

Looking After Your Own Wellbeing

Small, consistent actions can help:

– Talking openly about financial stress rather than carrying it alone
– Seeking advice early
– Staying connected with neighbours and community
– Taking breaks
– Keeping perspective

Knowing When to Seek Help

There are times when support from friends and family isn’t enough—and that’s okay.

In Australia, services like Lifeline Australia (13 11 14), Beyond Blue, and the National Centre for Farmer Health are available to support rural communities.

A Shared Responsibility

Mental health on the land isn’t just an individual issue—it’s a community one.

Farming has always been about managing risk. But behind every decision, there’s a person carrying that weight.

If there’s one message to take away, it’s this: check in. Start the conversation. Be willing to listen.

Because while seasons will always change, no one should have to carry the pressure of them alone.

With clients spanning from Goondiwindi, QLD, through to Adelaide, SA, we’re seeing consistent themes emerge across the agribusiness sector. While there is plenty of noise around fuel prices, fertiliser and interest rates, the primary driver of decision-making on the farm right now is seasonal conditions.

Dry conditions continue across northern and southern NSW, which is influencing key operational decisions, particularly for livestock producers. We’re seeing breeders being sold down and stocking rates reduced heading into winter. While parts of southern NSW received some late summer/ early autumn rainfall, conditions have since tightened again.

In contrast, parts of Victoria and South Australia are seeing improved conditions, which is supporting a more stable outlook in those regions. As always, seasonality remains the single biggest influence on confidence and decision-making across the sector.

Are people still borrowing?

The short answer is yes; however, behaviour is becoming more considered.

We are still seeing farm transactions being executed in certain regions, but alongside this, there has been a noticeable increase in clients looking to review their existing debt structures. In a more dynamic lending environment, ensuring finance is structured correctly has become just as important as accessing new debt.

At the larger end of the market, some clients are taking a more proactive approach. We’re seeing increased demand for pre-approvals ahead of potential acquisitions in late 2026 and into 2027. These clients recognise both the opportunity in the market and the time required to arrange and structure larger, more complex debt facilities.

Are our clients fixing or hedging their interest rates?

With the cost to fix rates currently sitting at a premium (generally 0.75%–1.25% above variable), many clients are choosing to remain on variable rates.

While there is some concern around short-term rate movements, there is also a view that a slower economic environment may see rates ease over the longer term. When combined with the flexibility that variable structures provide, this is influencing the decisions we’re seeing.

That said, there is no one-size-fits-all approach. Clients with higher leverage are more likely to hedge a portion of their exposure to manage risk, particularly where cash flow certainty is critical.

Are the banks being more cautious?

We are starting to see a shift in lender behaviour, with some banks taking a more conservative approach to new lending.

This is typical in periods of economic uncertainty. Small policy adjustments, whether in servicing, security, or structure, can have a meaningful impact on borrowing capacity and deal execution. These changes are subtle but important, and they reinforce the value of being well-prepared when approaching the market.

Historically, agriculture has performed strongly through downturns, particularly during periods such as the GFC and COVID. However, that doesn’t remove the need for well-structured, professionally presented finance in the current environment.

Are we still seeing off-farm investment?

Yes, although activity has levelled out.

We are still seeing enquiries from clients looking to invest in off-farm assets, particularly commercial property. However, higher input costs and increased interest rates are impacting the investment equation.

As a result, many clients are prioritising capital allocation back into their core operations, ensuring their existing business is well-positioned before pursuing external investments.

Top Three Succession Tips

1. Start early. Even simple guardrails can create clarity and direction. 
2. Ensure all key stakeholders are aligned from the outset. 
3. Don’t give up if progress is slow; these conversations take time.

Other interesting trends

1. We’ve seen a noticeable increase in purchases of secondhand equipment, driven by the rising cost of new machinery. Many clients are choosing to redirect capital into existing operations rather than upgrading equipment. 
2. Investment in on-farm infrastructure, particularly within livestock operations, remains strong, as producers focus on efficiency and long-term productivity.

To navigate this environment, having clarity around your financial position and a plan for the next 12–24 months is critical. Whether it’s reviewing your current lending structure, planning for working capital, or preparing for future opportunities, taking a proactive approach will place your business in a stronger position. At SproutAg, we’re continuing to work closely with clients to ensure they are well-structured, well-informed, and ready to act when the right opportunities arise.

On the second Tuesday of March, the Reserve Bank of Australia (RBA) lifted the cash rate by 0.25% to 4.10%. This marks the second consecutive increase, effectively clawing back almost all the reductions we saw last year.

While Australia did not raise rates as aggressively as some of our global peers in recent years, it is now one of the first developed economies to begin lifting rates again. This shows inflation in Australia has remained higher for longer than expected.

Inflation was already a key concern, and the current geopolitical conflict is now adding further pressure, particularly through rising oil and fuel prices. While no one knows how long the conflict will continue, the impact on fuel costs is already evident.

Fuel is a fundamental input across the entire economy. As prices rise, this flows through to the cost of goods and services more broadly, with increased input costs ultimately being passed on to consumers.

So, while inflation was already a challenge before the conflict, markets are now expecting further rate rises and a longer period of higher interest rates as a result of these added pressures.

Despite the RBA raising the cash rate to 4.10%, money markets are pricing in a rate of 4.50%. While forecasts for the cash rate range between 4.25% and 4.50%, some suggest it could move higher if global pressures persist. The reality is no one knows exactly where rates will peak, particularly given the ongoing geopolitical uncertainty.

What is more certain is that interest rates are likely to remain higher for longer, as inflation is still sitting above the RBA’s target range of 2–3%, and while it has eased, it remains elevated. Ongoing supply chain pressures and higher input costs may continue to keep inflation above target for some time.

For our clients, it’s important to consider not just the interest rate, but the structure and flexibility of your finance. As lending conditions tighten, it can become more difficult to refinance, change lenders or make structural changes to your finance, particularly in situations such as succession planning or asset sales. 

A key question we’re encouraging clients to consider is:

Where do you believe interest rates will peak, and how does your position hold up at that level?

How can you position your business?

If inputs continue to increase, it’s expected that there will be higher costs incurred by your business. To combat this, you may need to seek greater working capital, and short-term funding for your business. 

While most businesses complete a cashflow forecast, many are not reviewing it frequently enough to keep up with current conditions. What’s required now is a rolling, monthly forecast, that gives you a clear and current view of your cash position. A rolling forecast, means you are constantly resetting your outlook based on the latest information, giving you clear visibility on your cash position.

If you typically complete your annual budget in January, it should now be re-forecasted to reflect rising interest rates, higher input costs, and potential further increases.

From a planning perspective, every business should be:

1. Re-costing operations based on today’s prices
2. Running multiple scenarios, including higher cost environments
3. Building greater resilience into forecasts and decision-making

This should not be done in isolation. If you have a team, ensure those responsible for key cost areas are involved and accountable. In family businesses, it’s equally important that all stakeholders, particularly where succession planning or family payments are involved, understand the impact on cashflow and future capacity.

If your forecasting highlights a need for additional working capital, now is the time to discuss this with your debt adviser.

Communication is critical. If you anticipate pressure points, such as tighter cashflow in coming months, it’s far better to have that conversation now rather than waiting until it becomes urgent.

In a stable environment, fixing your interest rate often favours the bank. Typically, there is around a 0.75% difference between variable and fixed rates, meaning you are effectively betting that rates will rise beyond that margin.

Historically, there have only been a small number of windows where fixing made clear sense, notably leading into the GFC and again during COVID when rates were at record lows.

Based on current settings, choosing to fix today assumes that interest rates will rise materially from here. This brings us back to the key question:

Where do you believe interest rates will peak, and how does your position hold up at that level?

While there is uncertainty around interest rates, one consistent theme through previous cycles has been the resilience of the agricultural sector. During periods such as the GFC and COVID, farmland values held firm. Currently, livestock and wool prices remain strong, and if geopolitical pressures continue, we may also see support in grain markets such as wheat and barley.

Three Key Recommendations

1. Don’t panic

Large global shocks often feel worse than they play out. Stay measured and focus on what you can control.

2. Re-forecast your position

Introduce a rolling forecast into your business. Understand your cash position, test different scenarios, and plan for higher costs.

3. Communicate early and often

Strong communication is critical, within your business, with your family, and with your funder. If additional funding may be required, have that conversation early and put the right limits in place before you need them.

The current environment is uncertain, with inflation, interest rates and global events all influencing the outlook. However, the fundamentals remain the same.

Businesses that stay disciplined, maintain visibility over their cashflow, and communicate early will be best positioned to navigate the period ahead.

At SproutAg, our role is to help clients cut through the noise, make informed decisions, and position their business with confidence, not just for the next 12 months, but for the long term.

Banks generally lend on the three C’s:

1. Capacity (what you can borrow
2. Collateral (your security position)
3. Character (who you are)

Although this message will focus on your borrowing power, or in bank language, “capacity”, it’s important to remember that if there are any issues with your character, then it doesn’t matter about doing the calculations around your borrowing power. 

What impacts Character and how it’s assessed by the Bank?

1. ATO arrears
2. Excesses on Bank accounts
3. Arrears on Bank accounts
4. Defaults from providers
5. Court actions
6. Banks will Google you.
7. Some Banks complete Police checks
8. What has this person accomplished
9. Do they have a trading history
10. Are they capable of executing what they want to achieve
11. Do they have a history in the industry
12. Overall experience

So, Why is Borrowing Power Important?  

There are two key fundamental parts of your business that determine Borrowing Power.

1. Cashflow Forecast.
2. Business Plan. Your Year in Year out or Annualised Cashflow (this is the most important item in Australian Agribusiness Banking, and almost all the Banks are similar in what this is.

What should be in my Business Plan (for Bank purposes)

Put simply, it is where your business is going to be in three to five years’ time, based on an average year. So, if you have a livestock breeding enterprise and you are building up your breeder numbers, you will base your revenue in your business plan on where your numbers will be in three to five years’ time. Similarly, if you are in a cropping enterprise and you are a developing country, then it should reflect the arable area in three to five years. 

The same process then applies to expenses (both operating and living expenses). There may be one-off expenses in your business from the last 12 months or even projected for the next twelve months. These one-off expenses should not be included, as the banks wish to see a projection of average expenses and where they’ll be in three to five years’ time. 

So, revenue minus operating expenses minus living expenses gives your free cash flow or what is available for servicing debt.

When projecting your revenue and expenses, take a slightly conservative view of where your business will be in three to five years’ time (or based on an average year, rather than a really bad or really good year).

Once your cash flow has been forecasted out, the next step is to allocate your debt repayments. Naturally, banks want to make sure you can service the debt, particularly if interest rates increase. So, using a higher interest rate (usually 2% higher than the current market), banks determine if you’ll still be able to service the loan over 15-20 years. 

This is an important point, as banks vary in how they allocate loan servicing. For banks that amortise over a shorter period, you generally need a stronger business plan to meet their criteria (for more information, please contact your Sprout Ag advisor). 

To Summarise, your borrowing power is determined by revenue – operating expenses – living expenses – cost of debt (your debt amortised over 15-20 years with a higher rate), and if you have a surplus based on this or in technical terms, after principal and interest sensitised, this may be regarded as a loan that can be serviced. There are some instances where banks look for an interest coverage ratio or some look for a surplus of 1.2 times; this is a good guide to start with. 

For a deeper understanding of what banks are looking for and which one will suit your needs, contact your SproutAg advisor for a one-on-one conversation.   

Many of our clients are approaching a crossroads, where they are starting to ‘cap out’ with their current management team. The management team is often made up of the husband and wife, and possibly one or two more junior members of that operation. However, the husband and wife are still having to do most of the thinking and the work.

This is usually a result of them not having hired a capable, senior member with the right capabilities to lead the team. Or it can be a result of not having the right systems in place to be able to lead a more senior person and set them up for a leadership role.

Often, farming owners and leaders see hiring a senior staff member as an expensive exercise, not only from a time perspective to recruit the right person, but also the added cost of remuneration that comes with the responsibility.

Investing in infrastructure such as fencing, livestock handling facilities, and upgraded machinery or technology can make a farm more efficient. But efficiency alone doesn’t create growth. Growth requires people. When it comes time to expand into other enterprises, having someone accountable for operations allows you to step away from the day-to-day and focus on the bigger picture.

To really expand an operation and still be present for your family, having good people around you who can take on additional responsibility in your business is a key element. If you are constantly holding your manager’s hand, and they’re unable to handle the pressure of the business, then you’ll struggle to scale and grow your business.

Top Four Tips

Allocate the Time

This is a crucial component in your business. Dedicate the time to finding the right person. Don’t just rely on putting an advertisement up to find the right person. Meet with people on a regular basis and build your talent bench. If you don’t have the time, hire a strategic recruiter who will sit down with you to understand the business, the business’s needs, and the type of person you want and strategically select talent.

Managing yourself

Most farming owners and leaders are perfectionists, and all have a particular way of carrying out tasks. The reality is that not everything is going to be done the same way you’d approach it. There’s value in giving a manager the autonomy to complete a task their way, and you never know, they might have a more efficient approach that you choose to adopt. As a leader in your operation, it’s important to know when to let go and when to step in and provide guidance.

Manuals/ Inductions/ First Six months

When onboarding a new manager, it’s important to set up a program that maps out what success looks like. Set the expectations early and check in on a regular basis to provide an opportunity for learning and guidance. Take the time to understand what responsibilities they would like to take on and tailor a plan around this to suit your operations’ needs.

Structure

People like structure, and they like to have clear direction from the leader. Often, farming businesses are chaotic, and they are constantly changing, but having time set aside for weekly, daily and monthly meetings helps. Every business is busy, but unless you set the structure up early and make it work, it won’t happen. Having the ability to constantly debrief and provide feedback in the right way is critical to setting up a manager or team for success.

Taking the time out of your business to recruit a capable manager to take on responsibility can create opportunity and open doors for expansion. The wrong hire can cost a business, so taking the time to recruit and invest in the right people is just as important as investing in infrastructure.

Aligning ownership in a family farming business

A key element of every transition plan is aligning the family business’s ownership goals. Ownership of assets is often the hardest agenda item for families to work through.

Farming businesses are now more complex than ever, with higher asset levels, higher debt levels and more family members involved across generations. Completing a successful transition takes deliberate time out of the day-to-day, and almost always requires structured conversations with family members involved. 

What we consistently see as advisers is that families often get 80% of the way through their plan, but as business pressures take over, the final 20% is left unresolved. That last portion is where the strategy comes together, where clarity is established, and where future conflict is avoided. When it’s left incomplete, unresolved decisions and unspoken feelings can create significant issues down the track.

How do we align Ownership and Assets Goals?

1. Current Family Leaders and Their Core Values

It’s important that the current leaders, owners, shareholders, partners, and/or directors first understand what they want. Every family is different, and at SproutAg we know that the values that shape a family come from upbringing, history of the farm, how the business formed, and the experiences of each leader (often Mum or Dad). These values are what guide ownership decisions.

These core values can be the driver around asset ownership into the future, and while there is no right or wrong answer, the existing leaders typically determine the asset allocation. 

2. Understanding Individual Financial Circumstances

Individual financial circumstances are also a key driver when aligning ownership and asset goals. 

Key questions almost always include:

1. What do Mum and Dad need if they step away from the business?
2. Is the farm financially sustainable in the future?
3. What level of debt can the business genuinely support?
4. What is a fair level of financial support for non-farming family members?

These questions help shape what is possible and what is practical.

3. No One Approach 

There is no secret recipe for the above; however, when all the stakeholders are considered carefully and thoughtfully, a workable direction usually becomes evident.

4. Include Non-Working Family Members

Their needs matter too. It’s important to consult and understand the needs and requirements of non-working family members. 

5. Farm Viability 

If the goal is to keep the farm, the numbers must stack up. If a family wishes to retain the farm, it needs to be viable into the future.  

If You’re a Family Leader, How Can You Get Started?

Take the time to sit down with your partner to map out your assets and what is important to both of you. 

Consider how you’ll feel later in life and what would be a satisfactory lifestyle? 

Ask the key question: Do we want to keep the farming business?

There is no correct answer, but if the response is yes, it often means financial outcomes between siblings will not be equal, and that’s where guided conversation becomes essential. 

For more information about Succession Planning, and getting the conversation started, contact us today. 

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!