Agricultural finance finds its way into the market in the case of managing the huge peaks and troughs of cashflow. Whilst Agriculture is a highly successful industry playing a key role in the global economy there does seem to be an important problem that persists throughout the sector.
There are an ever increasing number of external factors which even the most business-savvy farmer cannot control – such as the seasonal nature of farming, the weather, the ever fluctuating interest and exchange rates and of course most frustrating of all, the late payment cycle
From late BPS payments to extended payment terms from supermarkets, it can be near-impossible to match all outgoing expenses such as wages, expensive new equipment and the high costs of production with unpredictable income.
Many farmers are experiencing difficulties in securing flexible and affordable funding from traditional bank finance that meets their needs.
Agricultural Finance: A solution
Selective Invoice Finance (SIF) simply and quickly reduces pressure by releasing the funds locked up in unpaid invoices.
It’s is an easy process. First, the client chooses which invoice they would like to finance. The SIF provider then funds up to 84% of the invoice immediately and the other 16% (minus a small fee) when the invoice is settled.
SIF as a solution to Agricultural Finance, means that clients don’t have to sell into a weak market, spend on overwintering or give away any control of their business. Essentially, it allows farmers to level the playing field by collecting payment for months of production as soon as the goods are delivered.