Why preparation pays off
Right now, large parts of rural Australia are struggling through tough conditions. From floods in NSW to dry conditions in South Australia, farmers are under pressure. Getting the right finance in dry times and making the right financial decisions is more important than ever.
If you’re dealing with a dry season, tight cash flow or rising costs, sometimes you just want to focus on surviving. But if you’re going to survive in the long term, you need to ensure you make smart decisions that will set you up for recovery.
As a broker with over 20 years’ experience in farm finance and bank negotiation, I know firsthand how much difference the right approach can make.
Recently I spoke at a Livestock SA event about the importance of managing finance in dry times. I also talked about the power of preparation when you’re negotiating with your bank.
One of the key messages I shared, and want to share again in this blog, is you can’t assume loyalty equals reward.
Talk early, and plan ahead
If you’re facing financial pressure, don’t wait to talk to your bank manager or accountant.
Start by reviewing your cash flow budget, updating your tax returns, and being realistic about your position. Planning early gives you the chance to consider different options, rather than being forced into a corner when things are at their worst.
There are a range of support programs you can explore, including:
- Farm Management Deposits (FMD)
- Regional Investment Corporation (RIC) loans
- Farm Household Allowance (FHA)
- On-Farm Drought Infrastructure Rebate Scheme
You don’t need to figure it out on your own. For extra support, talk to services like:
And don’t forget that looking after your mindset is also important.
Presentation matters
Negotiation isn’t just about asking for a better rate. If you want to be successful and get the best deal from your bank, you need to know how to present your case.
You need to:
- Know your numbers
- Understand your business
- Be clear and specific about what you’re asking the bank for.
This is where working with a broker like me can help. Brokers will help you understand what the bank wants to know about your business. We can help you prepare detailed submissions, clearly outlining your position and the value you offer as a borrower.
Don’t settle for a ‘good bloke’
The fact your current bank manager is a ‘good bloke’ or a ‘great woman’ isn’t a good enough reason to stick with them. Sure, it might be easy, but what is your bank loyalty costing you in the long run?
I had one client who could have saved $18,000 annually by switching banks. But instead they accepted a higher offer because they were loyal to their existing manager. Shortly after, their bank manager left the bank, proving that you should always put your business finances first as banks don’t necessarily reward loyalty.
Another client saved $55,200 per year by refinancing $3.5 million.
In a third case, even with fixed rates and a $60,000 break fee, we saved my client $71,000 annually.
These aren’t just numbers. They are concrete improvements you make to your business bottom line that will help you ride out the tough times and give you the option to invest in the future. Imagine what your business budget would look like if you could make savings like this.
Review regularly
As much as we might all like the idea of ‘set and forget’, it’s not the right approach to ensure you get the right finance in dry times. You need to regularly review your farm finance.
If you haven’t reviewed your loan structure and interest rates in the last 12 months, you could be paying more than you need to. We’ve already had 2 interest rate cuts in 2025, and interest rate creep is common, especially if the bank doesn’t feel they are at risk of losing your business.
If the idea of shopping around or comparing rates sounds overwhelming, or like another task you won’t have time for, it’s ok. That’s where having a broker in. your corner can help. We can benchmark your interest rates, help you prepare your document and negotiate with multiple lenders. We’ll make sure you get the best deal, so your farm finance is working for you.
Get in touch
Do you have the right farm finance for these dry times? Are you getting the best deal? Perhaps it’s time to review your loans. If you’d like some advice on getting a better deal that works for your business, and saves you in the long run, please get in touch.
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