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AGRIBUSINESS REFINANCE

Our experts are with you every step of the way.

You’re in good local hands. With over 35 years of experience, we will guide you through the process from start to finish.

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    Agribusiness refinancing is quite common today, allowing borrowers to source and secure better deals than they got on their original loan.

    If you have been with your bank for more than three years on a variable rate, the chances are that your current variable rate will be higher than you can get now as a new client at another bank – banks tend to increase their variable rates (by not passing on the full Reserve Bank rate cuts) and fees to their existing clients over time. Your risk margin is commonly increased at annual review, unless you are on certain rates.

    Most banks are prepared to offer very attractive incentive rates to win new clients, so there is a good financial reason to consider refinancing.

    Refinancing can be particularly effective when you have already made repayments on your original loan and/or when the value of your property has increased (improving the equity ratios).

    Our mortgage brokers will help you evaluate your options. Contact us today.

    Why refinance your farm?

    The main reason to refinance your business debt is to save money. Over the life of a loan, you can potentially save thousands of dollars on repayments.

    Typical costs of refinancing

    Generally, when business debt is refinanced, you can expect to pay:

    • an application fee to the new bank
    • a valuation fee, as part of the mortgage process
    • mortgage discharge and registration fees.

    These are what we refer to as “switch costs”. In many cases, however, banks will waive or meet your switch costs to get your business.

    How to refinance

    Refinancing your loan is normally easier than it was to obtain the initial loan. This is because much of the work that you (or your broker) did to get your original loan can be simply updated and submitted to banks as part of a refinance application.

    If you’ve had your current loan for several years, you have probably paid off some of the loan and/or the value of your property will have increased – this means that you are in a stronger financial position to borrow, and you’ll be able to access better rates.

    Generally, without negotiation, you won’t be rewarded for your improved equity position by your current lender, but another bank will view your loan as lower risk, and offer better rates to reflect that reduced risk.

    Talk to Eakins Finance & Insurance to find out how long it will take to refinance your loan, and what information you need to gather to do it.

    We will prepare a credit submission on your behalf and request tenders from the lenders so that they know they are in a competitive environment. We’ll give you a comparison of your current offer against the new offers so that you can make an informed decision about switching.

    Contact our team of mortgage brokers today to get the process started.

    Loan refinance comparisons

    If you are considering refinancing, it’s essential that you research the loan market to understand how competitive your existing loan is, and what the alternatives are.

    Eakins Finance & Insurance can do a thorough review of the loan market on your behalf – most of the time, we can find a much better rate and terms than your current deal.

    Call our agribusiness finance brokers today to find out how much you can save through refinancing your farm.

    Eakins and Finance Team

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        Frequently asked questions

        Yes.

        Under Australian law, banks cannot force their customers to stay with them for the life of the loan. However, your bank may impose financial penalties for leaving (such as exit or break fees).

        Our brokers can review your loan for you and tell you what these fees and costs will be, and also what the “switch costs” associated with refinancing your property will be.

        In every case, we will make sure that if you choose to refinance, you will be financially better off under the new deal.

        Loans that used to be ‘set and forget’ are now commonly subject to annual review and require revaluation every three to five years.

        Each time your loan is reviewed, it’s your opportunity to test the market and make sure you have the most competitive deal available.

        One of our brokers can help you compare your loan against the products currently in the market, and determine how much you can save over the life of the loan (potentially tens of thousands of dollars, depending on the size of the loan).

        In most cases, we find that borrowers can get better rates from refinancing with a new bank when their loan is more than three years old. Banks tend to value new business far more than existing business, and will offer lower rates to attract new customers.

        If you’re on a variable rate, your current bank has probably increased the rate over time, or failed to pass on rate cuts, so the rate you’re on is no longer competitive.

        You will have more options when considering a refinance than you did when you originally took out the loan, because it’s more difficult for a start-up to get finance than it is for someone with a proven track record.

        If you have had your property for several years, your equity ratios have probably improved, which will give you access to better rates through refinancing than you are getting with your existing loan.

        For expert advice, speak with one of our brokers.

        The base rate that the banks quote for agribusiness finance will differ from bank to bank, and rates and lending criteria can vary from week to week.

        It is important that you review the market at the time you want to change your financial arrangements.

        Contact us for advice and assistance.

        Bad credit may limit the options that are available to you, but it is in no way a barrier to you refinancing your loan.

        Eakins Finance will help you source and compare your options. Contact us for a free consultation.