What to do about late farm loan repayments

Late farm loan repayments are likely in the farming business because of the seasonal nature of farming. If you are late with your Farm Loan repayments it is wise to talk it over with the bank immediately. Let them know when you are able to make the repayments or what arrangements you have made to fix the cashflow problems.

Loan Default from late farm loan repayments

Default is what a borrower does when they fail to meet loan contract terms. That is why it is important for all borrowers to keep a copy of the loan agreement signed by them and the bank. Borrowers need to know what they have agreed to, sometimes years earlier. Late loan repayments causing  a borrower to default on the loan agreement often result in the whole debt becoming due immediately. That can then lead to the home, farm or security property being sold up by the bank to clear the debt.

Don’t wait until it’s too late

It is best to stay ahead of the game and initiate a call to the bank. In one case we were called in to save the family home of a couple with three children. This was just as the bank was about to have the home auctioned. We had to move fast to deal with bankers, lawyers and sale trustees to prevent the sale and get the loan back on track.

Move fast for an agreement to last

Farmers and business owners who for one reason or another cannot make loan repayments on time. In almost 40 years of helping them, we have found very few cases where we cannot persuade the bank to give the borrowers a break. We re-negotiate the situation so that farm loan repayments can eventually be restored and continue. The same applies to trade creditors.