Quick answer
Farmers usually borrow to buy or expand land, finance machinery, and carry input costs such as seed, fertiliser, fuel and feed until harvest or sale. Agribusiness banks are often the cheapest lenders for established farms with good equity. Machinery finance suits tractors and harvesters, and seasonal facilities cover the gap between planting and income. When a bank says no, non-bank and private lenders can lend against rural property, and the government's Regional Investment Corporation offers specific farm loans.
Key points
- Farm income arrives in large, irregular lumps, so lenders judge a farm over several seasons rather than one year
- As at its February 2026 product sheet, the Regional Investment Corporation's Farm Investment Loan offered up to $2m over 10 years, with up to five years interest-only
- Farm Management Deposits let eligible primary producers set aside up to $800k of pre-tax income for lean years, which lenders read as a genuine buffer
- Livestock, crops and machinery are personal property, so security over them is registered on the PPSR
Most businesses get paid every week. A grain grower might get paid properly once a year, and only if it rains at the right time, the frost holds off and prices hold up. Between sowing and the header rolling out, the farm spends heavily on seed, fertiliser, chemicals, fuel and wages, then waits. That rhythm is the starting point for every farm loan, and it’s why the best farm lenders think in seasons, not months.
This page gives an overview of farm finance for owners across cropping, grazing, dairy and mixed operations. For deeper detail, see our pages on cattle and grazing, grain growers, dairy farmers and horticulture.
Why do banks lead in farm lending?
Agribusiness is one area where banks are especially strong. The big banks and specialist rural lenders such as Rabobank employ agribusiness managers who understand seasonal cash flow, commodity cycles and the value of land and water. For an established farm with good equity and a solid track record, a bank is usually the first and cheapest stop, and an offer from one deserves serious consideration.
Where farmers come unstuck is when they fall outside the bank’s comfort zone: a run of poor seasons, a new or expanding enterprise, a property in a less liquid area, a succession dispute, or a deadline the bank can’t meet. That’s where government loans, non-bank lenders and private lenders come in.
What do lenders look at on a farm?
| Factor | What lenders want to understand |
|---|---|
| Multi-year performance | Results across at least three seasons, including how bad years were handled |
| Equity | Land value against total debt; most farm lending rests heavily on this |
| Land and water | Location, size, soil, rainfall, irrigation and water entitlements |
| Enterprise mix | Whether income relies on one crop or market or is spread across several |
| Commodity exposure | Prices for the main products and any forward contracts in place |
| Succession and ownership | Who owns the land, any family arrangements, and plans for the next generation |
| Off-farm income | Wages or other income that support the household in lean years |
A budget showing expected income, costs and timing for the coming season helps more than almost any other document. Our cash flow gap calculator is a simple way to show a lender when the shortfall peaks.
Which kinds of finance suit which farm needs?
- Land purchases and expansion. Long-term farm property loans from banks and rural lenders, usually requiring a deposit and strong financials. For a quick purchase or a bridging situation, a non-bank lender may lend against existing land. See business loans against rural property.
- Tractors, headers, sprayers and seeders. Equipment finance or a chattel mortgage, often through manufacturer finance arms such as John Deere Financial and CNH Industrial Capital, or through banks and independent equipment lenders. Some offer repayments timed to harvest.
- Seasonal working capital. Seasonal overdrafts or a secured line of credit, drawn at sowing and cleared after harvest or sale.
- Livestock purchases. Stock finance or working capital, with the livestock sometimes taken as security.
- On-farm infrastructure. Sheds, silos, fencing, water storage and solar, funded through term loans, equipment finance or, for solar, green business loans.
- Urgent or difficult situations. Private and second mortgage lending over rural property when timing or credit history rules out the bank.
If you’re planning ahead for sowing, a machinery change-over or a property purchase, a one-minute enquiry gets an experienced person reviewing your circumstances; making the enquiry doesn’t involve a credit check.
What government-backed farm loans are available?
The Regional Investment Corporation (RIC) is a Commonwealth lender for farm businesses and farm-related small businesses. According to its February 2026 product sheet:
- Farm Investment Loan: up to $2m, a 10-year term and up to five years interest-only, aimed at farm businesses recovering from severe disruption and preparing for future ones.
- AgBiz Drought Loan: up to $500k on similar terms, for small businesses that depend on farming communities and are coping with, or rebuilding after, drought.
Both are subject to eligibility and credit criteria, and RIC loans typically sit alongside a commercial lender’s finance rather than replacing it. The government committed an additional $1 billion in new loan funding from 1 July 2026. Our profile of the Regional Investment Corporation has more on how it works.
How do Farm Management Deposits affect a loan?
Farm Management Deposits (FMDs) allow eligible primary producers to park pre-tax income after a strong season and withdraw it when a poor one comes along. The Department of Agriculture lists a maximum of $800k held in FMDs, and a primary producer’s non-primary production income must be under $100k in the year of the deposit for it to be deductible.
To a lender, healthy FMD balances are a strong signal: they show the farm plans for bad seasons and has a buffer that doesn’t depend on borrowing. Mention them in any application, and talk to your accountant and lender about how FMDs interact with your overall debt, as some banks offer ways to link them to farm borrowings.
Can livestock, crops and machinery be used as security?
Yes. In Australia, livestock, crops, wool and machinery are personal property, so a lender’s security interest over them is registered on the PPSR rather than on a land title. That matters in two ways:
- Buying. When you buy used machinery or stock privately, a PPSR search tells you whether another financier still has a claim over it.
- Borrowing. A lender may take security over stock or equipment to support working capital, but the value it gives them depends on prices, condition and how readily they can be sold.
What makes farm lending harder?
- A run of bad seasons that has eroded equity and built up debt.
- Concentration in one crop, one market or one buyer.
- Water insecurity, particularly for irrigators relying on allocations.
- Family or succession complications, such as land held across several family members without clear agreements.
- Overdue tax or loans from several machinery financiers with no overall plan.
If finances are tight, the free Rural Financial Counselling Service can help you get organised before speaking to lenders. Our guide on how farmers manage seasonal finance covers practical budgeting too.
Example: a mixed farm funds a new header and a big season
A hypothetical example with invented figures. A family runs a 2,400-hectare mixed cropping and sheep operation in the central west of NSW. After two average seasons and one strong one, they want to replace a 15-year-old header before harvest and need to fund a larger crop program.
Their bank agrees to extend the seasonal overdraft but wants a fresh valuation of all the land before approving more term debt, which won’t be done before harvest. A manufacturer finance arm funds a used header for $420k on a chattel mortgage, with the header as security and repayments set annually after harvest. The family also holds FMDs from the good year, which reassures both lenders.
Once the land valuation is complete, the family plans to review the whole package with the bank, but the header is ready in time for harvest.
Let’s talk about your next season
Farming asks you to commit money months before you know what the season will bring. Banks are a great fit for many farms, and when the bank can’t help in time, there are other routes. We regularly look at machinery, working capital and loans against rural property, including for farms a bank has turned away.
The enquiry form takes about a minute to fill in. Your credit history isn’t looked at when you send it, and your information goes no further than our team, so you won’t be chased by a string of lenders. Someone who understands rural lending reads it and gives you a call. Please share accurate figures for your land, debt and recent seasons, so we can point you to a suitable option the first time.
Frequently asked questions
Are banks the best place for a farm loan?
For many established farms, yes. Agribusiness bankers understand seasons and commodity cycles and are often the cheapest source of land and working capital finance. If your bank says no, wants more security, or can't move fast enough, non-bank lenders, private lenders and government-backed loans are worth exploring.
What is the Regional Investment Corporation?
It is a Commonwealth lender that provides loans to eligible farm businesses and farm-related small businesses. As at February 2026, its products included the Farm Investment Loan of up to $2m and the AgBiz Drought Loan of up to $500k, both subject to eligibility and credit criteria. The government committed an extra $1 billion in new loan funding from 1 July 2026.
Can I borrow against rural land that isn't my home?
Often, yes, though lenders treat rural land differently from city property. They consider the size, location, water rights, improvements and how easy it would be to sell. Many lenders lend a lower share of the value on rural land than on suburban houses.
How do lenders treat drought or a bad season?
Lenders know bad seasons happen. They look at how the farm performed over several years, how much equity it holds, and whether there's a plan for recovery. A drought-hit year with a clear explanation and solid equity is very different from a run of losses.
Can I finance a used header or tractor?
Yes. Machinery dealers, manufacturer finance arms and equipment lenders regularly fund used machines. They look at the make, age, hours and condition, and a PPSR search should confirm nobody else holds a claim over the machine.
Where can I get free help if farm finances are tight?
The Rural Financial Counselling Service offers free, independent financial counselling to eligible farmers, fishers, foresters and small related businesses facing, or at risk of, financial hardship. Counsellors can help you prepare for conversations with lenders.