Farming and agricultural businesses have financing needs unlike most other industries: seasonal income, weather-dependent cash flow, high-value equipment, and land and livestock that represent both the business and its primary security. Whether you’re financing new machinery, expanding your land holding, building your herd, or managing cash flow through the season, understanding how lenders assess agricultural finance can help you structure the right facility. This guide covers finance for Victorian and Australian primary producers.
Tractors, harvesters and general farm machinery are typically financed through a chattel mortgage or lease, secured against the equipment itself. New equipment generally attracts a higher available loan-to-value ratio than used equipment, and terms are usually matched to the expected working life of the machinery. See our equipment finance options for farm machinery and vehicles.
| Equipment Type | Typical Term |
|---|---|
| Tractors | 5 to 7 years |
| Harvesters | 5 to 10 years |
| General equipment (implements, balers, seeders) | 3 to 7 years |
| Utes and farm vehicles | 5 to 7 years |
Expanding a farming operation through a land purchase is generally financed over a long term, reflecting the productive life of agricultural land, with the land being purchased and often existing property held as security. Lenders will assess the productive capacity of the land, its location and access to water, and how it fits with your existing operation.
Purchasing breeding stock or expanding a herd can be financed against the livestock itself in combination with property security. Terms are generally shorter than land finance, reflecting the productive life and turnover of livestock, and rates depend on the security offered and the strength of the operation.
Cash flow through the season can be managed with a seasonal overdraft charged on an interest-only basis during the season, input finance to cover seeds, fertiliser and chemicals, harvest finance to bridge the gap until the crop is sold, or a flexible working capital line of credit.
Government-backed concessional finance schemes are periodically available for drought-affected areas, natural disasters and eligible primary producers, generally at reduced rates compared with standard commercial finance. Check current eligibility with your state’s rural finance authority or Regional Investment Corporation.
Specialist rural and agribusiness banking teams understand farming cycles and can offer flexible seasonal repayment structures, competitive rates for established farmers, and longer terms for land purchases than a standard commercial lender.
The major banks all maintain dedicated agribusiness divisions offering competitive rates for prime borrowers, larger facilities for bigger operations, relationship banking, and broader farm management services alongside finance.
Manufacturer finance arms and equipment finance specialists can offer promotional rates on new equipment, fast approval, and seasonal payment structures aligned with harvest income.
A standard principal and interest structure pays down the loan balance over time, reducing total interest cost and building equity faster, though at the expense of higher regular repayments.
An interest-only structure keeps regular payments lower, with principal repaid at harvest or sale time, matching the loan structure to the farm’s natural income cycle. This suits many seasonal cropping and livestock operations.
A seasonal repayment structure is customised to the farm’s income cycle, with higher payments scheduled after harvest and lower or interest-only payments during the growing season, and is particularly well suited to cropping operations.
Agricultural lenders look beyond a single season’s results to understand the farm’s performance across a full cycle, including good years and poor ones. They will typically review your farm management plan or budget, the diversity of your income streams, and how you manage risk through insurance and, where relevant, hedging or forward contracts. Water access and entitlements, soil quality, and the property’s exposure to drought or flood risk are also key considerations for land-secured lending.
Lenders will also want to understand succession and management arrangements, particularly for larger facilities or longer loan terms, and will look at whether the farm has a track record of reinvesting in equipment and infrastructure rather than deferring maintenance. A clear, realistic budget that accounts for input costs, seasonal variation and reasonable contingency is one of the most useful things you can bring to a lender.
For farm equipment, new machinery generally attracts a smaller deposit requirement than used equipment, and manufacturer finance arms occasionally offer promotional low or no-deposit terms on new equipment. For land purchases, expect to contribute a substantial deposit, since rural lenders take a conservative approach to loan-to-value ratios on agricultural land compared with residential property, reflecting the more specialised nature of the asset and a smaller pool of potential buyers if the security needs to be sold.
Livestock finance sits between these two, with lenders generally requiring both the livestock and property security to support larger facilities. Across all agricultural lending, having additional security available, such as equity in an existing property, generally improves both the loan-to-value ratio you can access and the rate you’re offered.
| Finance Type | Typical Structure | Best For |
|---|---|---|
| Chattel mortgage | Own the equipment from day one; interest and depreciation may be tax deductible | New and used farm machinery and vehicles |
| Term loan (land) | Long-term facility secured against the land, principal and interest or interest-only | Land purchase and farm expansion |
| Livestock finance | Secured against livestock and, in many cases, property | Purchasing breeding stock or expanding a herd |
| Seasonal overdraft | Interest-only facility drawn down and repaid within the season | Input costs and cash flow through the growing season |
| Line of credit | Approved facility, draw down and repay as needed | Ongoing working capital and unexpected costs |
Equipment finance is generally the fastest to approve, followed by livestock finance. Land purchases take longer, given the need for valuations and more detailed assessment, and seasonal facilities sit in between, depending on the complexity of the operation.
We work with lenders who understand farming operations and seasonal cash flow, across equipment, land, livestock and working capital finance.
Deposit requirements depend on whether the equipment is new or used, with new equipment generally requiring a smaller deposit than used equipment. Some manufacturers offer promotional low or no-deposit terms on new equipment, while established farmers with strong financials may access a higher loan-to-value ratio.
Yes, many rural lenders offer interest-only or seasonal repayment structures that suit seasonal farming operations, where income arrives at harvest or sale time. These are typically available for a set period before converting to principal and interest repayments.
Rates vary across equipment, land, livestock and working capital finance, and depend on the security offered, the farm’s profitability, your experience and the loan size. Established farmers with strong equity generally receive the most competitive rates.
Rural lenders generally take a conservative approach to land lending, financing a lower proportion of the purchase price than for residential property. A higher loan-to-value ratio may be available with a strong financial position and additional security, but expect to contribute a substantial deposit plus purchase costs.
Concessional finance schemes, drought assistance, natural disaster recovery loans and young farmer programs are periodically available. Eligibility and terms change over time, so it’s worth checking current programs with your state’s rural finance authority or the Regional Investment Corporation.
It’s more challenging, but achievable. Lenders generally prefer to see some farming experience, so options for new entrants include starting with equipment finance, demonstrating relevant agricultural qualifications or experience, providing a detailed business plan, and considering a farm management partnership. Rural banks tend to be more flexible than major banks for new entrants, though a larger deposit is often required.
We service Geelong, the Surf Coast and regional Victoria, and work with rural lenders who understand primary production.
Credit Representative 575841 of Connective Credit Services Pty Ltd, Australian Credit Licence 389328.
