Australian Agricultural Finance Solutions

Agricultural finance solutions for Aussie farmers

At Stacked Finance, our mission is simple. We help Aussie businesses secure the assets they need to succeed. This includes farmers and agricultural business owners. Whether you’re looking for a tractor, trailer, car, sprayer, or another type of ag loan our team goes above and beyond to ensure you have what you need when you need it.

We generally consider four key factors when helping our clients secure assets for their business.

1. Agricultural Asset Details

The good news is that we service all industries, from construction to farming. So no asset is off-limits for us. This includes trucks, trailers, tractors, sprayers, plows, seeders, harvesters, and other agricultural equipment.

However, various factors will impact the available lenders, interest rates, repayment options, and verifying and obtaining the asset. These can include:

• Asset type and specifications (is it income producing?)
• Is the asset new or used and can it be verified?
• The condition of the asset (does it still work and will it have a healthy resale value?)
• Age of the asset at the end of the loan term (<25yrs old is best but not required)
• Dealer vs private sale
• Specific industry requirements and standards
• Asset compliance and regulations (e.g. vehicles need registration)

2. Loan Structure

Most businesses want to obtain the asset ASAP so it can used to generate a return. However, the speed at which you need the asset will impact the type of loan you will apply for.

For example, if you need finance for a tractor within 24hrs you’ll want to move ahead with a no-doc or low-doc loan. They come with rigid criteria (usually a fixed matrix) and higher rates. They also rely heavily on your credit score to be approved.

Here are some questions to think about:

• How fast do you need the asset?
• Are you willing and able to leave a deposit?
• Which loan term makes sense for your business?
• Do you want to own the asset from day one?
• Do you want to own the asset after the loan term?
• Do you prefer to retain working capital (cash) or do you want lower repayments?
• Do you intend to pay off the asset sooner than the loan term?

There are loads of questions to be asked in the early stages of applying for your loan. This is why we recommend booking a free 1-1 discovery call so our experienced team can guide you through the steps. We’ll make sure we get you the very best deal with the least amount of paperwork.

After you’ve answered these questions you’ll likely choose one of the following loan types:

Chattel Mortgage: Your business owns the asset (e.g. tractor or sprayer) immediately but the lender holds a mortgage as security. You can claim tax deductions for GST, depreciation, and interest.

Commercial Hire Purchase: Your business rents the asset from the lender with regular payments until ownership transfers at the end of the term. There are also tax benefits for GST, interest, and depreciation. This is typical with business vehicles like trucks and vans.

Finance Lease: Your business rents the asset from the lender without gaining immediate ownership. You can deduct lease payments as operating expenses, with the option to purchase at the end of the term.

Operating Lease: This is for businesses that prefer to keep the asset off the balance sheet. Your business rents the asset, and maintenance is often included. You return it at the end of the term and can deduct payments as operating expenses.

3. Business Financials & Income Verification

When it comes to financials and income verification, lenders are trying to determine if you can make repayments. In other words, the lender needs to know you can afford the loan repayments.

The business must be doing well enough to handle the repayments over the life of the loan as well. Your business financial position will help determine the loan terms like the interest rate, deposit, and repayment schedules.

The type of documentation you’re required to provide will depend on the loan type you apply for (e.g. low doc or full doc). You may only need to provide your personal and business credit score for low documentation loans (low-doc) or no documentation loans (no-doc) provided your ABN and GST are over 2 years old. Usually, bank statements are not even required.

In most cases, our team of brokers will guide you on whether your application will be approved at no doc, low doc, or full doc. And which loan type makes the most sense for your situation.

However, for a full documentation loan (full-doc) lenders may ask for: Business tax returns · Balance sheets · Profit and loss statements · BAS statements · Bank statements · Personal and business credit scores

Every lender will have their own product guide and policy that determines which documents they require to access specific products, rates, and terms.

4. Tax Considerations

Tax implications are crucial when financing equipment in Australia. They can seriously impact your bottom line and make or break your decision.

For example, with a chattel mortgage, you can claim GST upfront on the equipment purchase (which means getting a chunk of cash back quickly), plus you can deduct depreciation and interest payments at tax time. This can save you thousands each year and improve cash flow.

We’ve partnered with a team of accountants who help us review your needs and make the most informed decision.

So whether you know exactly what equipment you want or need guidance, Stacked Finance can support you across various Australian industries.

Book a free 1-1 discovery call with our team today or submit an online enquiry.