Succession is a topic in farming that almost everyone has a story about, and sometimes those stories don’t end well. While there are certainly some horror stories, succession can also be a really exciting time. Seeing the next generation step in, bringing new perspectives, and even giving Mum and Dad the chance for a well-earned holiday or two is something worth looking forward to!

In farming, getting succession right is critical. With family, business, and finances all tied together, tough conversations are inevitable. However, with the right professionals around you and proactive planning, succession can be less of a burden and more of a new chapter in your family’s legacy.

At Purvis AgriFinance, we are experienced in helping farming families navigate the financial side of succession. There’s no one-size-fits-all approach, but here are some common scenarios and how we can help.

1. Paying Out a Family Member

Not everyone wants to stay on the farm. When someone decides to step away, another family member often needs to buy them out creating the challenge of freeing up cash.

Because farms usually don’t have liquid cash reserves, payouts are often financed through borrowing. This is where we step in:

• If you already have debt: we can restructure or increase existing lending, so the payout can happen without overburdening the business.
• If you have no debt: we help you navigate taking on new lending, finding products and interest rates that best suit your circumstances.

2. Splitting the Entity

Many siblings farm together successfully for years, but when the next generation comes along, it may make more sense to separate the businesses.

This often means:

• Setting up new banking arrangements
• Taking on more debt to establish independence
• Negotiating ownership of land, plant, and equipment

We support this process by structuring loans to match the realities of farming cash flow. In many cases, we negotiate interest-only periods to give the new entity breathing space while it establishes its footing.

3. Refinancing Debt into Your Own Name

If parents pass on the farm, along with the associated debt, it usually requires redocumenting and sometimes refinancing. This can feel overwhelming, particularly when banks ask for multiple years of financials, budgets, and supporting documents.

We guide families through:

• Deciding whether to stay with the current bank or explore other lenders
• Preparing and presenting documents in a way banks prefer to see them
• Negotiating loan terms that support the long-term sustainability of the business

4.  Preparing Your Farm for Succession

Sometimes you’re the one thinking ahead about your own succession. A farm that once supported one family may soon need to support two or three. Preparing now may involve:

• Land purchase – expanding the business to create enough scale and income for multiple families.
• Off-farm assets – diversifying investments to spread risk and provide equity or income streams for non-farming family members.

Both options usually require additional lending. We can help model different scenarios, assess feasibility, and approach lenders so you can enter opportunities with confidence.

Why Succession is Stressful (and What Helps)

It’s no secret: succession is emotionally charged. Balancing fairness with financial reality can bring up deep family tensions. But there are ways to make it less painful:

Our top tips for navigating succession:

1. Engage external advisors early
   Independent voices such as mediators, financial brokers, rural counsellors, and legal experts help take the pressure off family members who may otherwise end up in conflict.
2. Be respectful and transparent
   Even when opinions differ, clear and respectful communication keeps relationships intact. Farming families often live and work together burning bridges can have lifelong consequences.
3. Plan early
   The earlier succession is discussed; the more options are available. Waiting until there’s a crisis (ill health, retirement, or financial strain) limits choices and increases tension.
4. Balance fairness with farm viability
   Equal isn’t always equitable. Sometimes “fair” means ensuring the farming child or children have a viable enterprise to continue, while others are compensated in different ways.

Final Thoughts

Succession will always be a challenge it blends money, family, and business, three of the hardest things to mix. But it can also be the beginning of an exciting new chapter as the next generation takes the reins.

At Purvis AgriFinance, we help take the pressure off the financial side of succession so you can focus on what really matters: relationships, family harmony, and the long-term success of your farm.