NAB Special Loans for First Time Farm Buyers | Queensland country life

LEG UP: NAB Regional and Agribusiness Executive Julie Rynski says the Future Farmers Loan is designed to help experienced people become farm owners.

National Australia Bank has launched a new loan to help farmers buy their first properties in the face of soaring land prices.

Low equity requirements and terms of up to 30 years are two key features of NAB’s Future Farmer Loan designed to help farmers finance their first farm or manage succession.

NAB Regional and Agribusiness Executive Julie Rynski said the loan had been around for about eight months, after the bank decided it would find a way to help people become farm owners.

“I was reading an article about a Queensland manager who was looking to buy a property he had been working on for several years because the farmer wanted out and he just didn’t have the equity,” she said. .

“And I thought, wow, that sounds like something we should watch.”

Ms Rynski said normal interest rates would apply to Future Farmers loans to ‘make things fair’ for the bank’s existing customers but, as terms could be up to 30 years, principal repayments would be easier to manage.

Although Ms Rynski said she could not reveal how little equity would be required to secure any of the loans, she said applicants would need to be able to demonstrate strong farming experience to be successful and that income not agricultural income earned by themselves or their family would also be considered.

“It’s not always young people, but people who have potentially been doing this kind of work for a while and then had the opportunity to own their own piece of land,” she said.

“It’s just a way for us to say, if they have the experience and we know they’ll be able to make this sustainable and profitable for their own needs, that we’re happy to support them in a very different, which is less deposit and more return.”

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The Future Farmers Loan would also suit farmers who need to buy out siblings as part of a family succession process, Ms Rynski said.

The loans would still have to meet regulatory requirements for affordability, but represented a move within the bank’s own parameters, although, Ms Rynski said, NAB recognized that low-capital loans were not ideal for most businesses.

“The reality is that there is some risk associated with it,” she said.

“There is, absolutely, and in fact, not everyone wants a 30-year farm loan because, if you think about the fabulous seasons that people are having right now, most farm loans don’t actually last the same duration that an owner has.

“They have the ability to have quite exceptional seasons from time to time and then unfortunately some of them aren’t that good, so they usually try to shorten their schedule.”

Those with a Future Farmers loan would be matched with one of the bank’s agriculture specialists to help manage their finances and would be offered a subscription to the accounting software package, Xero, for better monitoring of their position.

“I think we are Australia’s largest agricultural bank, we are passionate about it and we know that for agriculture to succeed we need to support the next generation,” Ms Rynski said.

“The total number of farmers is decreasing year by year and you know, we just want to support who we can.”

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The story Loans for First Farm Purchases first appeared on Farm Online.

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