A family with more than a hundred years of farming heritage in New South Wales wants to consolidate separate holdings under a single owner but needs millions to move things forward.
AgLend facilitated the succession plan via a $1.2 million property buyout, plus an additional livestock financing of $150,000 to support the new sole owner’s entry into the prime lamb meat market.
Not all farm succession plans ends well. Sometimes, aggrieved parties harbor resentments that break even tightly-knit families apart.
Decades of experience consulting for family farms enable Aglend Finance to structure the best arrangements that benefit all parties and provide ample legroom for the resulting farm business to grow.
One such case is a family in NSW which runs a mixed-crop broadacre farm as well as a cattle-and-sheep grazing operation. The family has a farming heritage extending to more than a hundred years and has owned the land they work with for the same length of time.
At some point, the family agreed on a succession plan that aimed to consolidate all family holdings into a single broadacre mixed-farming operation under one owner.
To get the agreement executed, the designated owner needed to buy out all other stakeholders’ interests in the property for an acceptable price.
At the same time, the family has just been re-establishing their sheep flock after three years of drought in the area. They planned to build head count for their flock within one year after the consolidation, and to increase herd size as soon as the market for cattle improved.
To help the family achieve their goals, AgLend provided critical assistance on cash flow projections, gathered all required documents, and streamlined the entire process which can become tricky and intractable under less expert hands.
Aglend Finance made a strong case for the family with a major bank which recognized the merits of the loan proposal and had confidence in the family’s future plans. Together with the bank manager, AgLend consultants visited the family onsite to ensure that everything was in order.
The engagement resulted to the release of the following credit facilities:
- $1.2 million broadacre financing to buy out all family interests in the property
- $150,000 livestock financing for purchase of Wiltipoll sheep, a breed raised specifically for prime lamb meat.
As planned, the consolidation process successfully pushed through. The new sole owner of the broadacre farm also found himself well-positioned for future growth.