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You want a bank manager who brings value to your business and assists with debt structure, budgeting, and provides quality advice. During tough times, you want the reassurance of a strong and supportive relationship with your bank. Bank managers all need to find a balance between building relatio...

When choosing a banking partner it is important to know what level of authority is held at the local level to make credit decisions. Does your bank manager have full authority over all lending decisions? Does every application need to be passed up the chain to someone with whom you have no relati...

Everybody wants security and lenders are no different in this regard. Money lenders require security against the money that they lend you. This is often in the form of a mortgage over land and buildings, a specific security agreement over livestock and shares, or a general security agreement ove...

When dealing with your bank manager it is important to recognise that the bank wishes to understand your equity position, profitability, cashflow, sustainability, and your history or knowledge within the industry. With a strong understanding of your business numbers, you will know that these can ...

Providing a guarantee is where a family member or friend stands behind your debt by signing to the effect that they will be liable for repaying your loans should you be unable to do so. By definition, a guarantee is an undertaking to answer for the payment or performance of another person's debt ...

Break costs and break benefits may play a huge role in choosing a bank. A break cost is applied when you wish to terminate a fixed term loan before the term has been completed. This may attracts a higher interest rate than the rate of the day, resulting in a cost to the client to end the agreeme...

We said earlier that your bank is your partner. It follows that you would want your bank to have characteristics, services and offerings which you value for your business. These may include the following: ● Transparency; ● Contactability; ● Market interest rate; ● Clear communication lines; ● Ind...

Physical Location As fewer people are going into banks to conduct their business, the trend these days is for rural or small town banks to be further centralised. In fact, with the introduction of smartphones, tablets, and internet everywhere, many agribusiness clients are already using online...

You need a strong understanding of your numbers when you are sitting down with your bank or when a bank is pitching for your business. In both of these circumstances, you need to hold your own and provide evidence that you understand every aspect of your business finances. Being able to present ...

We cannot stress enough the importance of completing a budget and comparing actuals to budget on a monthly or bi-monthly basis. Monitoring this in line with your GST cycle allows you keep your finger on the pulse as opposed to getting a shock at the financial state of the business at the end of ...

One important aspect of managing your agribusiness’ finances is understanding the differences between types of loans and how to best manage the loan payments and options. Knowing the best way to make your funds work for you is all about being wise with your finances. In this chapter, we’ll talk a...

Loan Structure The loan structure is the basis of your loan, meaning the ‘rules’ governing it. Every loan has a lifespan or a term such as a 10 year loan for the purchase of livestock. Over and above the term is what is called a fixed interest rate agreement. The fixed interest rate agreement ...

For most of our agribusiness clients, the cost of the interest rate is the largest monthly bill that they have to meet. An interest rate that you’re sure you can afford is of utmost importance if your business is to remain sustainable. Clients often don’t pay attention to the spread of their fixe...