Get banking advice as help is available

Get banking advice as help is available

COMMENT
Opinion
financial help: Bagshaw Agri Consulting director Michael Bagshaw says to contact your accountant or bank to see what financial assistance packages are available.

financial help: Bagshaw Agri Consulting director Michael Bagshaw says to contact your accountant or bank to see what financial assistance packages are available.

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TIME will tell just how much agriculture is affected by the coronavirus outbreak.

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TIME will tell just how much agriculture is affected by the coronavirus outbreak.

Some industries have had immediate catastrophic consequences, agriculture not so much. Hopefully this remains the case.

As a result of the current situation, the government and banks have offered some assistance to businesses and individuals. These financial assistance packages have been rolling out over the past few weeks and there are probably more to come.

Banks have jumped on board very quickly, some might say, the Banking Royal Commission did the trick.

Above all, contact your accountant for any advice on tax incentives or deferrals.

They are also best to advise on the investment allowance provisions. This whole area is complicated, and everyone's situation is different.

Accountants, from what I have seen, have been proactive in distributing advice.

Get on the phone and ask the question. You may be surprised by what's available.

Likewise, if you are interested in finance options available, have a chat to your local agri-manager.

Grab a cup of coffee when you do this however, as all the banks are being flooded with calls at the moment and you may be waiting for awhile.

All the banks have options available, however they all differ slightly, which is why it is imperative you contact your particular bank.

I deal with agri-managers almost daily with my work, and I have had multiple conversations with them about this lately. They are all on top of what their particular bank is able to offer.

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For instance, most of the talk has been around the deferral of loans for up to six months. For some banks, this is automatically applied, for others it has to be requested. This certainly takes the pressure off loan repayments for a period of time.

But people need to be aware that this just kicks the can down the road. The interest that hasn't been paid during this time, is added to the loan balance at the end.

The loan term may be extended to keep the payments the same, but again, that is a discussion with you need to have with your bank.

The same applies for equipment finance payments, these can also be deferred for a period of time. If you have annual payments - which is common in agriculture - you would need to ask the question at your bank.

Home loans are also able to be deferred. Some banks have also reduced interest rates across the board. This varies from bank to bank, and from product to product.

Furthermore, there has been discussion around an unsecured $250,000 loan.

The bank still needs to approve the finance, it's not an automatic approval. This is interest-free for six months, with payments commencing at that point. The loan has to be used for working capital purposes. It is designed to tide businesses over until some "normality" returns.

These are uncertain times for everyone. It is a good time to reflect on what capital requirements your business needs, not just in the short-term but in the long- term.

The best advice is to seek advice.

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