Agriculture and farming: cash flow funding for seasons, seed and feed

Farming is the original seasonal business. Seed, fertiliser and chemicals are bought months before harvest. Stock needs feeding whether or not it is raining. Machinery must be ready for a narrow harvest window. And the cheque, whether from the grain buyer, the saleyards or the processor, arrives in a few large lumps. Many farms are profitable over a year and short of cash for much of it. The right funding smooths the gap between spending and selling.

How money moves on the farm

The cash cycle varies by enterprise, but the pattern is similar. Croppers spend heavily before and during planting, then wait through the growing season for harvest and payment. Graziers buy stock, feed and fodder and sell at times that suit markets and seasons. Horticulturalists and viticulturists carry labour costs through picking and wait for buyers to pay. Dairy farmers have more regular income but face big feed and input costs. Contract harvesters and agricultural service businesses earn in bursts tied to other farms’ seasons.

Why farm businesses seek funding

Common reasons include buying seed, fertiliser and chemicals before planting, feed and agistment during dry periods, urgent machinery repairs before or during harvest, seasonal labour for picking, shearing or harvest, stock purchases when prices are favourable, bridging the wait for sale proceeds, and fencing, water infrastructure or other improvements. Some needs are planned and some arrive with the weather.

Funding that fits farming

Line of credit. Drawn for inputs before planting or during dry spells and repaid from harvest or sale proceeds, a line of credit matches the farm cycle well. See business line of credit and our page on seasonal cash flow.

Short-term loans. For a specific outlay, such as a pre-harvest repair or a stock purchase, a short-term loan repaid from the next sale keeps it simple.

Emergency repair funding. When a header or tractor breaks down in the harvest window, every day matters. See emergency repairs.

Equipment finance. For machinery that works for many seasons, funding over its life keeps cash free for inputs. See equipment funding.

Property-secured loans. For larger needs, secured loans from $20k to $5m against residential or commercial property can provide more capacity. See secured business loans.

Inputs due before the season pays? Start an enquiry. No credit check to enquire.

How lenders read farm statements

A lender looking at three months of a farm’s statements in the middle of the growing season might see little income and heavy spending. That is why cash flow lenders familiar with agriculture look at a full twelve months to see the whole cycle. Help them by explaining your enterprise, when your main income arrives, who you sell to and what the funding is for. Statements showing previous seasons’ sale proceeds are the best evidence that the business can repay.

Drought, flood and disaster

Farms face risks most businesses never encounter. In drought, feed costs rise while income falls. Floods and fires can destroy crops, fencing and infrastructure overnight. Government support may be available through programs listed on DisasterAssist and business.gov.au, and ABARES publishes research on farm conditions and finances. Our guide to disaster recovery business funding explains how grants, insurance and loans can work together.

Planning the farm year

A simple annual cash plan, listing expected income by month and every major outlay, shows where gaps will appear and how large they will be. Many farmers already do this with their accountant or adviser. Bringing it to a funding conversation lets a lender see exactly what is needed and when it will be repaid, which makes the decision faster and the facility better matched.

Contractors and agricultural services

Not every agribusiness owns land. Contract harvesters, shearing teams, spraying and spreading operators, livestock carriers and agronomists all depend on the farm calendar but run their own businesses with their own cash cycles. They often carry expensive equipment, travel long distances and wait for farmers to be paid before they are paid themselves. For these businesses, funding that covers fuel, wages and maintenance through the busy season, repaid as farm clients settle their accounts, can be just as important as it is for the farms they serve. A line of credit sized to the season’s running costs usually fits well.

Managing input costs

Input prices for fertiliser, chemicals and fuel can move sharply from one season to the next. Some farmers lock in supplies early when prices are favourable, which means paying sooner. Others buy as needed and accept price risk. Either way, knowing when the big payments fall due and how they compare with expected income lets you decide whether to pay cash, use supplier terms or draw on a facility. Talk to your agronomist and accountant about timing purchases, and factor in supplier terms, which sometimes run to harvest.

An illustrative example

An illustrative mixed farming operation in the central west plants wheat and canola each autumn and runs a flock of merino ewes. Input costs for planting arrive in April and May, while grain is sold from December. In a dry winter, it also needs to buy feed for the flock. A line of credit drawn for inputs in autumn and feed in winter, and repaid from wool and grain income in summer, carries the farm through the year without delaying payments to its suppliers.

Fund the season, not just the month

If you run a farm or agribusiness and need funding for inputs, feed, repairs or labour, tell us about your enterprise, your season and when your income arrives. There is no credit check to enquire, your details are not shipped off to a crowd of lenders, and a real person reads every enquiry. Accurate seasonal details help us match funding to your year. Apply now.