This is an urgent alert to every Australian farmer who has farm debt. The source of this information is our Agmates member St Botolph, who for professional reasons writes for Agmates on the guarantee of anonymity. The information has been checked, verified and posted by Agmates Editor Steve Truman.
Right now across Australia as a result of poor commodity prices, poor seasons and a tightening credit market 1,000’s of farmers are in deep financial stress and are feeling isolated and overwhelmed as a result of their farm debt. This information is intended to help all of them and those that do not even realize they have a problem – yet. Now for St Botolph’s post.
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Farm Finance ALERT
The farming industry in Australia has reached breaking point, lenders in our farming communities have ignored the long term commitments and loyalty that farmers have given them over many years.
It is amazing to think that when farmers are cashed up how much additional money is thrown at them by lenders seeking to make huge profits from additional lending.
With farmers still in the midst of the biggest drought ever, lenders and investors are calling in farm debt to invest the money elsewhere.
The conduct of recovery of farm debt by a number of rural lenders in an increasing number of recent cases is at best immoral and at worst illegal. Using intimidation by way of threats and demands these lenders have railroaded some farmers into complying with their “on the spot” demands without farmers first seeking appropriate legal advice or the time needed to refinance.
Farming families are being divided and in some cases separated leading to divorce action because of the pressures and demands of some lenders.
The hatchet men from these lenders have no morals and will go to any lengths to recover farm debt by selling farm assets at any costs no matter what the result through the appointment of receivers managers or mortgagee in possession sales. As a result of such action, huge shortfalls in asset realization are being recorded. Then to put the boots in even further Lenders are proceeding to bankrupt farmers.
This is happening right now across the country as I write.
IT MUST STOP NOW
Practical Advise to all farmers
Take one day off, sit down with your family take a serious look at your true financial position as it stands today. Do not be fooled by misleading bottom lines, but focus on your farm debt.
Review who your lender is and how long you have been with them.
Think about your last meeting with your lending manager, do you recall any changes? Ask yourself the following questions -
1. Have we been restricted from any further borrowings?
2. Have we been asked to sell plant or land to reduce our farm debt level?
3. Have we received any letter reducing our overdraft limit?
4. Have there been any request for further security ?
5. Have we been asked to provide additional cash flows ?
If you answered YES to any one of those questions you must and I stress, must look at your term loan agreement. These are unprecedented times and a YES answer is a sign of immanent trouble.
In most cases your term loan will be 5,10, or 15 years. A term loan is your mortgage agreement.
Most overdrafts are reviewed each year.
Right NOW there are lenders using annual overdraft reviews as a trigger to call in ALL loans.
The interest rate on your term should be less than your overdraft but in some cases may be the same.
If your farm debt loans are ready to expire – be very careful. You must approach your lender at least 6 months before and discuss your over all roll over options. Do not take for granted that it will just roll over.
Do not ignore letters that call for farm debt reduction or reviews of your loans. If you have received such a request you should act NOW.
Seek professional advise from you account, lawyers or rural consultant who understand Rural Lending. Do this early. Do not wait until the receiver turns up at your farm to evict you before you reach out for a professional to assist you with farm debt mediation. By that time it is usually to late for anyone to help you.
If you think your safe be WARNED act NOW before you lose the lot.
END
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Disclaimer.
This information is provided free of charge as a service to our Agmates members. Agmates in no way financially benefits from providing this information. You should not make any financial decisions based on anything written or implied in this article and it should not be taken as financial advice of any kind. It is general information, published as an opinion on behalf of the writer and should not be relied upon.
If you are in financial trouble Agmates strongly and only recommends that you seek help immediately from a qualified and independent professional.
If you wish to contact the author St Botolph you can do so by phoning the Agmates Editor Steve Truman 0428 966819 in the first instance. Your privacy and total confidentiality is guaranteed.
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