Latest / Dollars In The Dirt / #011 - Reacting to HIDDEN Finance Traps in Farming

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#011 - Reacting to HIDDEN Finance Traps in Farming · Dollars In The Dirt

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  You'd be way better off borrowing money from the bank than
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  borrowing money from your own company. The ATO's benchmark interest
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  rates, it's 8.37%. I'm pretty sure all the bank
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  They are way lower. That's the thing. It's crazy to think that the ATO is going
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  I'm a bank, Brian, and I borrow
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  money and I lend it out and I charge more to the people I'm lending it to than
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  So they're using your money to lend to other people to make more
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  money and charge you fees. Makes complete
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  sense if you're a bank. That's how most farmers
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  feel when they're buying machinery. There's a lot of money going out, not a lot of
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  money coming in. Welcome to Dollars in the Dirt. I'm Breckin Curtis,
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  and this is where we break down the finance side of farming, so you can grow
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  your operation, buy that next property, and build real wealth.
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  Let's get into it. Hey guys, welcome back. We're going
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  to do some more reactions to some more videos today. I know you guys like these.
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  If you've got any ideas, send them through. But here we go
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  with some different videos. Sitting down with my banker to
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  All right, explain this to me like I'm a two-year-old, OK? Because there's an element
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  This is a pretty regular occurrence. Most bankers don't actually would
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  know how to get a loan to buy cattle or what
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  a cow is half the time. So this is a pretty regular occurrence.
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  And we often see that customers come to us and say, we went to our bank and want to
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  buy cows. And he had no idea where to start, the front end or the back end
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  of a cow. You make sure you've got the right person helping you when you want to buy cattle.
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  It's a pretty specialized industry and you need to know exactly
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  what you're doing when you're borrowing money for livestock. Yeah, and
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  we recently did an episode on the amount of branch closures in
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  rural Australia. I think it's 36% of rural branches are closing
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  down. just shows that you need to make sure that you've got someone
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  that understands livestock, the
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  rural industry, and not just walk into any old branch and
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  think that you're going to get a loan to buy some cows because the reality is
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  it just won't happen and it's pretty specialised and you need to
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  know what you're doing when you're doing it. He
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  didn't even get one drop in the Save Money cup. I
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  know that's how most farmers feel when they're buying machinery. There's a lot
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  of money going out and not a lot of money coming in. It's good to
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  have a good plan and make sure you understand where you're heading with your business so that you
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  don't feel like you're pouring water into a cup that's just with
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  no saving money going into it at all. I understand the feeling that most people
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  feel when they look at this. By the way, guys, if you're buying a lot of machinery, be
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  mindful that those repayments all add up. You
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  need to make sure that the machinery you've got is working for your business and
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  that you don't have extra repayments that will impact on your servicing ability
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  going forward by having machinery payments
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  on machines that aren't actually working or productive in the
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  farm can also impact on your ability
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  to borrow more money to buy a farm next door or to buy more
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  cattle or to expand your business. So it's really
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  important that you're mindful of your loan repayments and what
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  it means for your business. So guys, these videos of
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  Charlie's are very funny and I think it resonates with
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  a lot of farmers around, you know, what everyone goes through on a day-to-day basis. So
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  I think he does a great job and it's really,
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  Well, I'm a bank, Brian, and I borrow money and
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  I lend it out and I charge more to the people I'm lending it to than I pay
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  It's not that simple. Most people don't probably understand that the
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  banks are taking money from depositors and they're Lending
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  it out to borrowers that come in and want to charging a healthy margin on
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  top of that They pay the depositors not much for their money. Who
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  Well, from, you know, depositors, Brian. Have you got a dollar? Well, yeah, sure.
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  One dollar? One dollar. Right, okay, and you pay interest to me on
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  I do, but I also charge you fees. Well, why do you charge
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  me fees? Because, Brian, I'm looking after your money. Your money is secure with
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  me. I'm a bank. I mean, this is a very important amount of money. This is probably
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  Oh, good deal for me. Well, your money's secure
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  with us, Brian, and I then lend that money to businesses, and those businesses
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  I do, of course, Brian, and that builds the savings pool and we can invest more
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  So they're using your money to lend to other people to make more
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  money and charge you fees. It makes complete
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  sense if you're a bank. This is how it all works, and if
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  you don't have someone that's able to navigate that, understand what
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  the banks are looking for, understand how to get the best deal from a bank so
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  that you're not paying the highest amount of interest, you're going to be like
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  one of these, every other borrower that just goes in and gets the rate
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  that they're given by the bank. It's an easy trap to
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  fall into and we see it day after
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  day. People just take the rate that they're given from the bank and they
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  don't do the work to actually make the banks compete for your business and
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  also make sure that you've got the right fit with the right policies
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  for your agricultural business as well. You
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  know, explaining how banks work, it's not that easy, it's not that simple,
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  but if you've got the right person working for you that does understand it,
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  it will make a big difference for the result that you get. Just
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  quickly, if you're tired of explaining your operation to a new bank manager every
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  year, only to get a one-size-fits-all deal that doesn't fit
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  your business, we can help. At Season Finance, we do things differently.
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  We've got over 70 years of combined experience in agricultural lending
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  and we work for you, not the banks. We're the consistent expert team
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  in your corner, fighting to get the finance that actually helps you grow, purchase
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  the next property and build your legacy. Don't leave money on the table. If
• 5:48
  you're looking at your next move or just want a second opinion on your current setup, click
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  the link in the show notes to book a confidential, no obligation chat
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  with the team and we'll show you what's possible. Righto guys, now back
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  You'd be way better off borrowing money from the bank than
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  borrowing money from your own company. And why do I say that? Well, behold,
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  the ATO's benchmark interest rates for the 2026 financial year.
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  Oh, look at that, 8.37%. The ATO's charging people if they
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  It's 8.37%. And I'm no mortgage expert
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  or bank lending expert, but I'm pretty sure all the bank rates are
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  They are way lower. That's the thing. It's crazy to think that the
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  ATO is going to charge 8.37%. Guys, this is a really important
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  issue that we need to make sure that people understand that if
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  you're set up with a company structure and you're taking money out of the company,
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  there's all sorts of implications that you need to make sure that you're talking to your accountant about.
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  Maybe also having a structure put in place with your
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  finance broker just to make sure that you're
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  not getting charged with this 8.37% interest rate that's ridiculous
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  that the ATO is charging people in 2026 because the
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  actual rate is a lot lower than that if you borrow the money from
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  a bank or, you know, other options are out there to
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  make sure that you're not paying this ridiculous interest rate that the ATO is
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  Farmland in Australia over the past 20 years has
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  had the strongest performance of capital growth. It's
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  performed at circa 9% compounding over
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  the past 20 years. So it has a really strong track record of
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  performance. And naturally, they're not making any more farmland
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  that can be farmed. So the land that there is, is all
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  there will ever be. And all of the billionaires in Australia play
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  As we've talked about in the past with Bill Gates buying farmland, Jeff
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  Bezos buying farmland, it's
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  a great investment and 9% year on year is what Jack's taunting
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  on this video. I think it really, really
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  goes to show that if you've got a farm and you're looking to expand or you're wanting
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  to get into a farm, you need to make sure that you've got everything lined
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  up so that you have the ability to buy a farm if an opportunity arises
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  because it's been selling quickly and if you're
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  not organized and you don't have all your ducks lined up to be able to act quickly
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  if an opportunity arises, well then you're going to get left behind. So it's
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  pretty evident that it's going to keep going up over time. Yeah, I
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  think Jack's right on this. Like 9% is probably pretty conservative really.
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  Like it's gone up a lot in spaces in the market. There's been
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  a lot bigger growth in that year on year than 9%. So Jack's
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  definitely right around what he's saying here. Thanks for tuning in to Dollars in the
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  Dirt. If you've got value from today's episode, make sure to
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  subscribe so you never miss the insights you need to grow your business. And
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  if you're ready to stop being just another number to the banks, visit Season
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  Finance via the link in the show notes. Remember to follow us on