Getting farm finance while you’re growing your breeding stock can be challenging. This period typically doesn’t look great financially because you lose potential income when you hold back female stock to increase your herd/flock or have higher costs if you opt to buy new livestock. Despite this, it’s not impossible to get farm finance if you do your homework.
Many of our clients have difficulty getting farm finance during this time. However, with these simple tips, you can show your bank manager that your business is viable.
- Show you have a plan
A plan shows your bank manager you have a strategy guiding your business. The plan should clearly show your farm’s optimal herd or flock size and when you expect to achieve it.
- Line up your livestock numbers with your financial statement
Pull together the number of breeding stock you have, with retained female numbers separate from the last five years. These numbers should be presented against your financial statements to show the impact.
- Use your livestock schedules to support your growth goals
Your livestock accounts are an important way to back up the herd size you want to get to. This also shows how you will achieve this goal and should match up with your cash flow projects.
- More on cashflow
You need to prove you have the cash flow reserves to support your business during the lean years when you’re building your breeding stock by keeping female livestock. Often, this is the time to take up interest-only payments.
- Keep it simple
Sometimes you can overcomplicate the information you provide the bank when all you should do is show a clear story on how you’re working toward your goal.
This is a summary to give you general information on how to raise finance when things are lean while building breeding stock. All farming businesses are different, we can help you create a plan and help you present your business when it comes time to raising finance. Get in touch with your local SproutAg representative today to find out more.
