The right time to review your farm asset finance is before a repayment or a breakdown forces the decision. Looking at your machinery, trucks and loans once or twice a year gives you room to choose calmly.
Farming in Western Australia means income that rises and falls with the season. Your finance should be set up to match that rhythm, and a regular check-in is how you keep it that way.
When Should a WA Farmer Review Business Asset Finance?
Review your finance when an asset is nearing replacement, when repayments are squeezing your cashflow, or when your operation is about to change. These are the moments when a small adjustment can take real pressure off.
A few common triggers are worth watching for. A header or tractor is costing more in repairs each season. A loan was set up years ago on terms that no longer fit your income. You are planning to expand, add a truck, or take on more land. In each case, a conversation early on gives you more choices than one held in the middle of harvest.
It also helps to know what you currently owe against each asset. Many farms build up several loans over time, with different lenders, terms and end dates. Putting them side by side often shows where the pressure sits. Our farm equipment finance page explains the options available for machinery across WA.
Leasing vs Buying Farm Machinery: How the Choice Works
Buying means you own the machine and carry its value on your books, while leasing usually means lower upfront costs and you may not own the asset at the end. The right choice depends on how long you will keep the machine and how you want to manage cashflow.
Owning suits equipment you plan to run for many years, like a seeder or a header you look after well. Leasing can suit assets that lose value or become outdated quickly, or where you want to keep cash free for inputs. The trade-off is that leasing may cost more over the full term and you may have no ownership at the end, depending on the agreement. Buying ties up more of your capital and leaves you carrying the risk if the machine loses value faster than expected.
Tax treatment differs between leases and loans, so talk with your accountant before you decide. Our lease vs buy comparison lets you set the two options next to each other with your own numbers.
Refinance a Business Loan to Ease Harvest Cashflow
Refinancing a business loan means replacing an existing loan with a new one, often to change the term, repayment size or structure. It can ease monthly pressure, but a longer term usually means more interest over the life of the loan.
Consider a farmer with a header loan of $200,000 remaining, five years left, and repayments that are tight between harvests. This is an illustrative example at 6.75% p.a., not a quote. Over five years, repayments would be about $3,937 a month. If the farmer refinances the same balance over seven years at the same rate, repayments fall to about $2,994 a month. That is roughly $943 a month back in the account, which could cover fuel, freight or wages in a lean stretch.
The cost is time and interest. The loan runs two years longer, so the farmer pays more interest overall and stays in debt for longer. Some lenders also charge fees to exit an existing loan, so those need checking first. In this scenario, the farmer decides the breathing room is worth it for now, and plans to make extra repayments after a strong season where the loan allows. Actual rates and terms depend on your lender, your deposit or equity, and your financial position.
If the pressure is more about day-to-day costs than one loan, agri working capital loans may suit better, and they carry their own costs and terms to weigh up.
Heavy Vehicle Finance for Farm Trucks and Trailers
Heavy vehicle finance lets you spread the cost of a truck or trailer over a set term, with the asset usually acting as security for the loan. Planning replacement ahead of time helps you avoid buying in a hurry.
Farm trucks carry grain, livestock and fertiliser over long distances, and they work hard. Setting a rough replacement age for each truck and trailer gives you a date to plan around. Some finance structures include a balloon payment, which lowers regular repayments but leaves a lump sum due at the end. That lump sum needs a plan, such as selling or trading the asset or refinancing the balance. Our truck and trailer finance page covers how these loans are set up for commercial truck loans and trailer finance.
Which Numbers Should You Check Before You Commit?
Check the repayment, the total cost over the term, any balloon amount, and any fees for early repayment or changes. Looking at these together stops a low monthly figure from hiding a higher overall cost.
An asset finance calculator is a good place to start. Our asset finance repayment calculator shows what different terms and amounts could mean for your monthly budget. Treat the results as a guide only, because your final figures depend on your lender and circumstances.
It also pays to line your repayments up with when your income arrives. A loan that falls due in a quiet month is harder to carry than one timed around harvest sales, and some lenders can offer seasonal or irregular repayment structures. Ask about this early, as availability varies.
The team at BE Approved works with WA farmers on business asset finance, and we would be glad to look over your current setup with you. Call one of our team or book an appointment at a time that works for you, and we will talk it through at your pace.
Frequently Asked Questions
When should I review my farm asset finance?
Review it when an asset is close to replacement, when repayments are squeezing your cashflow, or when you plan to expand. Checking before harvest or a major purchase gives you more options.
Is leasing or buying better for farm machinery?
It depends on how long you will keep the machine and how you want to manage cashflow. Buying suits long-held equipment, while leasing can free up cash but may cost more overall. Ask your accountant about the tax treatment.
What is the trade-off of refinancing a business loan over a longer term?
A longer term usually lowers your monthly repayment, which can ease cashflow. You will generally pay more interest overall and may face exit fees on the old loan.
What is a balloon payment on truck or trailer finance?
A balloon payment is a lump sum due at the end of the loan that keeps regular repayments lower. You need a plan to cover it, such as selling, trading or refinancing the asset.
