Every business is different and a tailor made approach is required for each and every business. Your interest rate strategy must be aligned with specific goals as stated in your business plan, your equity position, and your cash flow together with future acquisition and/or debt repayment plans.
Identifying the interest rate terms on which to fix your loan must fit in with your current and future position. If you cannot meet a loan’s payment date, you will be charged penalty payments.
To mitigate the risk of cash short falls as a result of payout and livestock sales, you want to look at the average rate required. It is also good to spread some of the risk by ensuring you loans do not come due at the same time.