Farm Transition Loan allows customers to leave their farms on their terms, in their time

Selling a farm can take years – and  a toll – on the farmers going through the process. To enable them to do so strategically, and with as little stress  as possible, Heartland Bank is offering  a transition loan to buffer the burden.

Maximising your life’s work 

“Many farmers have worked their whole lives to build or maintain a farming business that holds the majority, if not all, of their wealth,” says Will Purvis, head of rural for
Heartland Bank.

“This product is designed to help farmers, who want to transition away from their farm – where succession is not practical or possible – by allowing them to access some
of that capital. It can be used for a wide variety of things, such as buying their next home, settling a farm or family debt, carrying out farm improvements to aid saleability or a host of other options that make the transition easier and more comfortable.”
The maximum term for the loan is seven years and the maximum amount is 45% of the farm’s value, with a minimum initial advance of $100,000. Interest will be charged at Heartland Bank’s published variable market rate.

“A key feature of this loan is that, during that seven-year period, no repayments are required,” says Will. “Ideally, this will reduce the stress associated with what is quite
often a difficult time – both emotionally and financially. It allows the owners to spruce up and polish the farm as required, to maximise the value of a lifetime’s work.”

Selling at the right time

Another key feature of the product is that the farmer can sell the farm or repay the loan at any time within the seven years.

According to specialist farm accountant Pita Alexander, the agricultural commodity cycle is five to seven years and he doesn’t expect those cycles to change much.  This makes Heartland Bank’s farm transition loan period long enough to allow farmers the flexibility to sell “at the right moment”.

If the market continues to heat up, it also allows the farmer time to maximise those returns.

“Spreading out the sale over several years means there could be a significant amount of capital gain added along the way, which may lessen the impact of the loan when it
comes time to sell,” says Will.

If you’d like to find out more about Heartland’s Farm Transition Loan, call us toll free on 0508 432 785 to make an obligation- free appointment with a Heartland Bank
rural manager.