The banking world has become much more restrictive and much more demanding.
We are in constant communication with each of the main trading banks and have a clear understanding of each of the bank’s requirements and the various limits they impose on the agricultural sector.
Our sister entity HC Partners LP run regular “lunch n tax” sessions for rural bankers in South Canterbury and are at the forefront of the requirements and demands being placed on the rural sector.
At HC Rural we can assist you with all aspects of your ongoing financial management.
Current banking covenants usually require an annual budget and regular monitoring of this budget. At HC Rural we are able to assist in this process and also review your banking arrangements with you.
This may include:
- Planning – Budget Preparation & Cashflow Forecasting
- Assistance to help you monitoring and manage your farm financial position – Cashflow monitoring including Monthly/ Quarterly Reporting Meetings
- Organising & Directing – Assisting you to set both short and long term goals and reviewing your progress
- Assisting you to make decisions – Both Financial & Non-Financial
Your Rural banker will undertake an annual review of your business which in most cases requires the prior year financials and a cashflow forecast for the upcoming year.
It is important that you understand what the numbers mean and can discuss this with your rural banker.
As an example – external factors may result in a decrease in income and therefore affect your ability to make the principle repayments you were making. It is important that your bank is aware of the reasons behind the change in servicing ability. It is useful when you approach the bank to discuss your position, whether you are seeking a deferral of capital repayments, or an extension to an overdraft, to provide actual and forecasted figures.
We are happy to assist you in this process, we can analyse your cashflows and ensure the bank gets a clear picture of what has occurred on farm As an example, a sheep & beef farmer may have had difficulty getting stock into the works or a crop farmer may be holding more crop than originally anticipated in both cases deferring the receipt of income which eventually will be received.
It may be that you have a capital project which will eventually add significant value to the farm but in the short term will require a break from making capital repayments. Again, we are happy to assist you to work through this process with your rural banker.