Loan Relief

“Generally, farmers’ confidence in the agriculture sector drives the demand for debt to fund land and capital acquisitions,” a Rural Bank officer said recently.

The average farm profit was also reported as being around $30,000. If that is the case the bankers giving a large farm loan might make more out of it than the farmer does working from sunup to sundown.

Loan relief can be self-generated  by the farmer finding out exactly how much in dollar terms they will have to pay yearly in both loan repayments and interest. If that can be easily repaid from their average net profit then they will have provided their own sense of debt relief.  The more easy it is to afford the interest and principal amounts repayable yearly the better, because for farmers changes in the weather can adversely affect profits.

But it may be necessary for any borrower, be they a farmer or a small business owner, to seek debt relief from a bank loan consultant by way of suggestions of how a difficult debt can be refinanced or to see whether the bank may provide debt relief by writing off some of the debt to make refinance more affordable . In one case we negotiated with a farmer’s bank to off half of the debt, making it a lot easier  for the farmer to service and repay the remaining with that bank.

Debt relief from weather event impacts

The problem is that a loan can quickly turn into a debt trap with a couple of bad years, a flood, fire or drought. When we help farmers or business owners to borrow or refinance we try to have provisions included in the contract term that allow for relief from repayments under certain circumstances. Again the borrower can help with that by, when possible, making double repayments in order to get ahead. The when we contact a banker to seek debt relief the banker is much more likely to say “Yes” because the borrower has built up a buffer so that the debt relief will not put them in arrears of the original loan contract.

My first reaction when confronted with borrowing has always been to see if I can achieve the same result for the client without them borrowing. So in that case I have already provided debt relief by them not borrowing at all. In many ways that is the best sort of debt relief to have.

Over the years I have been able to show farmers a variety of alternatives, from savings to trade-offs.

There are many ways to acquire debt relief, particularly in farming and small businesses. For those wanting to see what is available I developed the “FarmloanSeeker” or “FLS” a targeted enquiry to a range of banks. It is an easy way to check out what is available by way of debt relief and get the very best and cheapest loan possible