Borrower Beware of the farm debt trap
Borrower Beware of the farm debt trap

The dangers of borrowing

horse bolted Borrowing can be a bonanza if it helps create extra wealth, but…. A farm loan can also be an effective debt trap. Borrowing is the easy bit. Money is the bait. Paying it back is the hard part. Farms are lost a decade after borrowing, because a repayment strategy after you borrow is too late. The horse has bolted Types of farm loans This can happen as easily with a RICs loan as with Rabobank or a big 4 bank. It can happen with Agristarter loans for succession or general farm investment loans. It can happen with drought loans and disaster loans.

Interest not the main factor

Tread very carefully. Interest is not the main factor in any farm loan. A good farm loan can easily turn into a difficult debt. Farmers know that as with a pig trap, it is easy to get into farm debt but there may be no way out.


Get your pay-back strategy in place BEFORE borrowing. Borrow Better helps farmers plan their escape route before they borrow. Before you borrow contact  Borrow Better by GBAC, the farm loan consultant run by farmers for farmers.

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