Farm loans – what is different?

Plenty is different. Farming is different and farm loans need to be different. Otherwise they just become debt traps for the unsuspecting farmers.

Weather

Weather has a huge unpredictable impact on the ability of farmers to make loan repayments. That means the terms of the loan contract need to be tailored to fit with the weather pattern.

Bad seasons

Bad seasons are a key reason for loan defaults so the loan contract needs to provide flexibility in repayments to cope with floods and droughts. They are what farming in Australia is all about.

Fire

Bushfires rage in Australian summers destroying crops, pastures and often killing stock, so there needs to be a provision in each farm loan contract to cover what happens in the case of fire, flood and drought.

Pests

Mouse or locust plagues sweep Australia when seasons are just right for breeding and apart from costing a fortune to control, when out of control they can be very destructive of profits. Allowance needs to be made in the loan contract for pests.

Disease

Sometimes disease strikes, like bird flu, and devastates properties . This too needs to be taken into account when loans for as long as 15 or 20 years are taken on.

Stock on hand

This is a very valuable asset in any family business, but in city businesses stock on hand is inert and can be stored in a building. In farming the stock is alive and kicking and its nature can change in a matter of months depending on the factors listed above.

Loan management skills

Farmers are skilled at managing livestock, crops, pastures, soil, fencing, byers and sellers. They are not necessarily skilled in farm loan management because they are not doing it on a daily basis. At GBAC we are, on a national scale.

Borrowers Broker

We don’t call GBAC the Borrowers Broker, because we are not brokers and we never take any commission or other payment from lenders. We work only for the farmers and they pay us. It is rare for us not to be able to save them a lot more than what they pay us if fees, in the interest rate and charges they pay the lender.

Whoever pays the piper calls the tune

Don’t ever think that the broker who will be paid a fee of around $10,000 to deliver yo0u to a lender, is working in your interests above those of the bank that pays them. That is just impossible, no matter what the law says. Common sense is a lot more helpful than laws made by politicians who receive very large “donations” from the moneylenders.

Get it right from the start

When you want to get your loan working in your interests as well as those of the moneylending bank, give us a call at GBAC 0428 417 496, 0422907155 or 02 9988 3312 and let us get your loan set up correctly from the start. Farmers are caught like pigs in a trap by bankers who make loans on terms that are impossible for farmers to meet. Then when the farmers fail to do what is required the lender jacks up the interest rates to make it harder, bleeds the farm for as many years as it can until the debt approaches the market value of the farm, then sells the farmers up. Don’t get caught in this nasty debt trap and lose the farm!

Aussie Farmers Beware of the bank financial supermarkets

Farmers borrowing from only one bank-paid broker is like selling produce to just one Supermarket. The banks have become financial supermarkets fleecing farmers with the skill of a gun-shearer. They close branches, cut phone staff to keep you hanging on for ever then want you to travel miles to prove who you are.

Farmers come out worst. The 4 Big Banks alone earned a profit last year of $36 billion. That is to say they charged their customers $36 billion more than the services cost. The Banking Royal Commission revealed that many of them act illegally, dishonestly and deceptively. That is why as a farmer/HELP consultant I established the Borrow Better concept and service. It is how you lay the foundations for a loan that determines how well it works for you

The key to farm borrowing in Australia is to:

Prepare a good loan application explaining to the bank why it should lend to you
Use the Borrow Better presentation to each of the banks most likely to lend to farmers
On receipt of offers negotiate the cheapest loan with best terms and most friendly bankers
Ensure that all loan terms are clearly understood to avoid unpleasant surprises
Ensure that loan repayments are readily affordable in all seasons and circumstances.
Establish systems to ensure that repayments can be made in advance in good seasons to cover relief in bad ones.
Aim to clear the debt as early as possible
Ensure title deeds are safely recovered and mortgages discharged on repayment.

That is why it is better to borrow the “Borrow Better” way. And it is run by people not robots. Put some competitive pressure on the banks to win your farm loan business. We all work better under pressure. That is when banks give you the best deal.

Unseen brokerage costs farmers dearly
For every $1 million borrowed through a bank broker, the bank pays the broker around $7,000 which the bank recovers in interest and charges from the farmer. The farmer will possibly get the loan, but how the contract terms suit the particular farmer’s budget or circumstances is another thing. Neither the bank nor the broker will be that much worried about the farmer paying the loan back as long as the security is enough for the bank to sell the farm up anytime it wishes. The contract probably lets the bank do that anytime. But as long as the farmer works sunup to sundown to pay the bank interest of $60,000 to $100,000 a year per $1m borrowed, the bank will be no hurry for the loan to be repaid. But just when things get tough on the land is when the bank will often cut and run, calling the loan in at the worst possible time for the farmer. That is often when farmers call me at GBAC.

Borrow Better
That is why I set up the Borrow Better human app in 1987 when banks were first de-regulated. Some farmers will remember we called it Moneygrams then. One of the first users paid the $100 fee and made a cool $300,000 in interest savings because of it, without moving banks! It is better to get the right help earlier rather than later. We help farmers obtain the most suitable, cheapest loan, with the most suitable contract terms from the most agreeable banker, right at the start. GBAC is a HELP consultant.

When taking the bait watch out for the hook
What is not obvious to most people when borrowing is that the money is the bait and the contract the hook. Like fish, many farmers offered the loan happily grab it while it is going, without noticing or even reading the contract on which they are hooked, with their family farm on the line.

The Borrowers’ Broker
Sometimes I think of us as the Borrowers’ Broker because we take the borrower to all the banks and tease out the best one for each particular borrower on the basis of the farm production, seasons, prices and government policies and the family needs of the farmers. We also help the farmer to clear that debt as fast as possible because very often the bank earns more out of the farm than the farmer does. (Compare your “Interest paid” with your “net profit” or “taxable income” to see how it is for you).

Inherited debt – the farmers curse
Leaving the debt to be passed on to the younger generation is not a good idea. Plenty of farmers remember when the interest rates went up to 24%. At present, rates are low because recession is hanging over the world and has been since well before Covid struck. The good thing about recession for farmers is that they can usually feed the family, but it can make a big difference if the farm income drops and the debt goes into default, so that the bank forecloses. My second cousin, from whom I purchased the beef cattle property settled by my great-grandfather, told me that when he was young and depression struck, the only reason the bank did not sell the farm up from under his family was that its value had crashed and would not nearly cover the debt. Today the bank just sells the farm and writes off the rest of the debt. Banks make so much money that a write-off is just like a drop in the ocean. We often turn that to the advantage of the farmers tricked into unaffordable loans by ruthless bankers. My cousin took over running the farm, cutting costs to near zero. The day, decades later that he cleared the debt and recovered his title deeds he took his staff to the pub to celebrate. It concerns me greatly that some rural consultants and counsellors may be encouraging farmers to have their children borrow from a bank to buy them out. One farmer described that to me as “Child Abuse”.

Drought
As he handed the farm over to me on a substantial cash deposit and long payment terms, he warned me, “Remember, when you come out of each drought, you are heading into the next one.” It was sound advice. As revenue came in I saved money and hay for those long hot sunny days when there was not a blade of grass on the ground. Then I adopted a policy of gradual de-stocking as drought hit and breeding up numbers again in good seasons. That worked surprisingly well. A neighbour commented on how fast our place re-stocked after drought without ever buying cattle in.

Whip Hand
Farm profit is a mental process. Decisions on spending are the key determinants of being able to continue the farming life. We help farmers make those decisions, because we know that farming is the best life in Australia, but it is hard won. We also help farmers guide governments into doing what is needed for farmers. Farmers, as voters, mostly hold the whip hand, but too often don’t use it.

HELP Consultancy
A HELP consultancy is there to help its clients, not to focus on making money out of them. Today we see too many consultants and government services based around the service providers getting rich whilst the farmers battle seasons, governments and prices. My grandparents and great-grandparents would be happy that I have been able to establish a HELP consultancy that has helped farmers from the tip of FNQ to King Island and up to the Kimberleys then into the centre. There are many better farmers than me, but to run sheep at Tullamore and cattle at Braidwood along with a national HELP consultancy that grew out of my Chartered Accountancy practice is thoroughly enjoyable.

While banks make billions-Aussie loan seekers look around

Banks are counting up their money

Banks are counting their half year profits in billions. They have so much spare cash that they don’t know what to do with it. Loan seekers are looking around to see how they can share in those billions. They are they working with their banking consultants to see how they can keep their businesses and farms secure and profitable by obtaining better loans. Sadly they often rely on people who are not really working for them at all – like bank paid brokers and counsellors. While loan seekers look for funds to expand, banks buy back their own shares to use up some of their surplus profits.

Loan Seekers want the Honey

Farm loan seekers face a trifecta of major challenges with seasons, commodity prices and government policies driving many to distraction. But they want the honey – the sweetest loan they can get. Getting the honey always takes a bit of effort but it is worth every bit. The easy way to get the very best honey flavoured farm and business loans, is to spray a bit of smoke around and put the bankers into competition with each other. There is an Aussie farmer/accountant who ran his own businesses, sheep and cattle and thinks that banks should be a lot fairer to their loan customers. His farm loan seeker website puts the banks & other lenders into the financial sale yards of www.farmloanseekers.au to see what offers they can come up with when competing against each other for the farmer’s business. Bankers sure can sharpen their pencils when they want the business!

Experience Counts

Business loan seekers too need the very best loans, not just on rates and charges, but terms and conditions as well. GBAC founder Greg Bloomfield ran businesses in real estate development and equipment hire. He joined his first public company board when he was 21. He was a Fellow of the Institute of Directors by 24, just before qualifying as a Chartered Accountant, CPA and company Secretary. He bought is first sheep property in the 1980’s and moved to cattle in 1990. Greg knows that the best family business security comes from having lenders compete for the loan business through www.businessloanseekers.au and having a consultant to whom your financial security is the absolute top priority.

It is staggering the number of businesses and farms that get wound up or closed down without ever seeking assistance with their loans and cash crises. GBAC has been doing that for half a century. It works partly because clients only deal with the bosses.

Cost-of-living crisis

Cost of living a burning issue

Cost-of-living crisis is top of mind of many Aussies in recent times. Top of the list are late loan repayments.

Loan Default

Default is what a borrower does when they fail to meet loan contract terms due to late loan repayments. It is usually caused by a cost-of-living or cashflow crisis. Late loan repayments causing a borrower to default on the loan agreement often result in the whole debt becoming due immediately. That can then lead to the home, farm or security property being sold up by the bank to clear the debt.

Cost of living causes problems for borrowers.

Many borrowers faced with lack of cash seem to hope the problem will just “go away”. It doesn’t! It is best to stay ahead of the game and initiate a call to the bank. If you are a business owner or farmer contact GBAC if you would like us to negotiate with your bank and or other trade creditors to give you breathing space. Mostly they will all help you once they know you have professional assistance and are doing your best to meet the loan terms. From a pure business perspective, they do not want to lose your business. They just want to know you are doing your best to fix the problem with professional guidance.

In one case we were called in to save the family home of a couple with three children. The bank was about to have the home auctioned. We had to move fast to deal with bankers, lawyers and sale trustees to prevent the sale and get the loan back on track.

Move fast for the agreement to last

In almost 40 years we have helped those who for one reason or another cannot make loan repayments on time. We have found very few cases where we cannot persuade the bank to give borrowers a break. Re-negotiation can restore loan repayments and continue the loan to its full term. The same applies to trade creditors.

Refinance Risks

Why refinance can have risks.

Refinance risks can vary, depending on a wide variety of circumstances. That is because a person who is refinancing is sometimes under more pressure than before. If refinance is not arranged within a specified timeframe, the existing bank could threatening receivership, appoint a manager or foreclosure and sale at auction. The borrower is looking for loan relief.

The best way to deal with that problem is to turn the tables on the bank from whom one is refinancing, by researching its behaviour to identify where it broke the law, the code of conduct or fair trading laws and then sitting down and telling it some home truths about what happens when you raise that by Votergram to some 225 Federal Politicians

Assessing refinance risks by comparing loan repayments against farm profit

“Generally, farmers’ confidence in the agriculture sector drives the demand for debt to fund land and capital acquisitions,” a banker said recently. The average farm profit was reported as $29,000. While many small country roads businesses are not so vulnerable to weather and commodity prices, many are with our major cities somewhat dependent on beach weather. Recent floods have devastated many businesses. Often such disasters dramatically reduce the security value of a mortgaged property. That is the ideal time to start gentle negotiations for the bank to write off a good bit of the debt. When the debt is reduced, the chances of refinanced are enhanced. Those who have played their cards right will often find themselves refinancing a much smaller debt. That is converting risk into advantage.

A Borrower’s Budget

It is vital for farmers and business operators to find out exactly how many dollars a year they will pay in loan repayments. Then compare that to their budgets. Make certain that the budget reflects the current reality rather than a fairy tale invented for a bank. Loan repayments and interest have to come out of profit. It is rash to think that the farm loan or the business loan will produce extra net profit. It often does no such thing and even if it does, it usually takes a few years to do so. A borrower’s budget is their best friend. It should regularly compared with the same period in the previous year and the actuals in the present year.

There is usually a big difference between the total income or turnover of the enterprise. Profit is the bit left after expenses. Loan repayments must be made from Profits. Don’t be misled by turnover!

Refinance Options

The problem is that a even a loan refinance can quickly turn into a debt trap. This can happen with a couple of bad years if the economy crumbles or flood waters cut business. My first reaction when confronted with refinance or even original loans has always been to see farm in drought if it is possible to achieve the same result without borrowing from a bank.

Over the years, I have shown farmers a variety of alternatives, from savings, to interest-free loans and trade-offs.

Assets can be acquired without getting the bank involved. Publicised interest rates and charges are not the best that can be achieved when borrowing. Offers of special rates and reduced charges requires negotiation. Those wanting to borrow on best terms and conditions, the “FarmloanSeeker” or “FLS” targets an enquiry to a range of banks. It is an easy way to check out what is available. Then negotiate the very best and cheapest loan possible.

Debt help!!

The need for Debt help

This year CBA will earn 10,000 times as much in real money terms as it did before bank de-regulation. The banks are pulling in massive profits just as their customers are drowning in debt. Why? Because the banks have been marketing their mortgage loans to borrowers with big asset backing and those borrowers are now drowning in unaffordable debt as the bankers knew they would. But in the process the banks have often broken the law and the Code of Banking practice as well as fair trading regulations, all of which the recent Royal Commission identified, but did not compensate borrowers for the damage done.

Traditionally we individual Aussies trusted the banks and put up with the way in which they treated us. That was because there was not much else we could do. To fight a bank in court could cost millions.

GBAC has found that by analysing and researching facts, figures and bank behaviour it often turns out that the borrowers have been deliberately tricked into loans with impossible terms that the borrower did not read. The banks often banked on that, particularly with busy family business owners and farmers who were more skilled in their own enterprise than borrowing and just trusted the banks to do the right thing. Prior to de-regulation the bank would have done the right thing.

Turbocharged Voter-Power for borrowers

Today mortgage borrowers, in their role as voters have great sway over government because GBAC realised that Parliament controls the bureaucracy which delivers government and the voters, control who sits in parliament.

GBAC has developed the Votergram Turbocharge system that allows each and every borrower to tell every single member of any or every Parliament, what the bank has done to them, how unreasonable the bank has been and how disastrous bank de-regulation has been when borrowers are literally robbed and financially abused so that banks can earn billions and their executives can earn multi-million dollar salaries.

Many banks faced with the option to sit down and sensibly discuss how best to deal with the debt in a way that treats the borrower fairly or have the matter discussed by the federal parliament, opt to confer with the borrower and GBAC’s negotiators for an outcome that is fair to the borrowers first. They are after all the customers and the most vulnerable party. If the bank does not act fairly the borrower with GBAC’s assistance can Turbocharge the campaign for a fair go, by Votergram for help

Today there is a completely free association of voters all over Australia. It is called the Australian Voters Network or Voters. It has no party politics and exists only to help and educate its members to persuade the parliaments to improve the fairness factor in Australian government policy. The more who join and share their own experiences, the fairer Australia becomes. It fits with the National Anthem doesn’t it? It is a good organisation for borrowers to join because it can help them a great deal when the crunch comes on.

Banks and Big Businesses Monopolies

For a long time the moneylending banks and big business monopolies have controlled government by bribing our elected MPs with election donations and bullying them with highly paid lobbyists. It looks as though the federal parliament is going to reduce that and such a move will again help borrowers in trouble with their bank.

Anyone wanting to learn a little bit more can contact GBAC which is run by a former Chartered Accountant / CPA who has run family businesses and farms as well, so knows just how hard it can be to clear big bank debts.

Democracy is the best system of government in the world, but only when driven by the voters to fulfil its potential. Government for the people comes from government by the people via their parliament. Borrowers have a great resource in their parliaments and GBAC has developed the tools to help them access it.

Join Voters now and Turbocharge your Voter-Power. Then give GBAC a call and see how they can help you. If bank behaviour has really upset you, you can go to the BankWatch site to record what happened so that it can be taken into account in submissions to government.

Greg Bloomfield

Debt Solutions for a Borrower

“The Winning Borrower”

“I was phoned one day by an IT executive, just after I had spoken to a farmer whose total crop proceeds had been seized by the bank. The IT expert had a similar problem. His bank account had also been frozen after a large deposit had been made into the account. The bank’s receiver took it all.”

So begins “The Winning Borrower”, the story of how one Sydney Chartered Accountant with a farming and family business background became a “bank loan consultant” and took on the big banks to provide Aussie debt solutions for Aussie farmers and business owners.

Baseball bats to battle bank debt issues

In the process of negotiations, mediations and refinancing, he discovered the disturbing details of how banks lied, cheated and trapped farmers in debt they could not clear without selling the farms and did the same to business owners who had mortgaged their homes. The author relates how untrustworthy banks have exploited customers in their quest for multi-billion-dollar profits. He takes a metaphorical baseball bat to the bankers, explaining how some of his clients ended up making more profit out of their loan settlements than out of farming or business.

Royal Commission investigates bank loan problems

The day the Prime Minister announced that there would definitely not be a Royal Commission into the banking industry, the author sent a Votergram to each one of the 225 Federal MPs decrying the decision. Within days the decision was reversed and the Royal Commission announced.

Author makes book free to farmers during March

“The Winning Borrower” 85 page e-book by this businessman,4^th generation farmer, Chartered Accountant and CPA , who became a bank loan consultant by accident, is available during March as a FREE e-book to help business owners and farmers all over Australia enjoy more profitable and secure lives.

Fake bank debt dispute resolution

Fake bank debt dispute resolution solutions.

John Collett in SMH Money 24 January 2024 highlights problems with 100,000 complaints to AFCA. Australia’s Fake Complaints Authority. This free bank debt dispute resolution service is an industry internal complaints body, provided by the banking industry, for their own benefit. It is a FAKE, in pretending to be a “Government Authority”. Hoping to get your bank disputes resolved by a shop front with no teeth can leave you feeling disappointed.

Government owned banks.

Get a fair go from dishonest banks. Contact a genuine bank loan and bank debt consultant like GBAC. In addition, those taken down by their bank may want government control of banks for a fair banking industry like Australia had before de-regulation in 1987. Bankwatch can help you persuade Federal Parliament to re-introduce government owned banks to provide honest competition.

Bank dispute resolution trends.

Australia cannot afford to have businesses foreclosed on and sold up or sent to Debt Mediation. Thousands of small to medium sized family businesses are tricked into unaffordable loans. Moreover, unaffordable loans can result in receivers appointed, assets stripped and sold off.

Resolving bank disputes.

It is no good expecting free advice from the banking industry to make the banks pay up for the damage to their customers. GBAC can provide good business debt consultants to help write off interest-inflated debt caused by dishonest bank practices.