Agricultural Lending: Insights from the Field

For many of them, a bit of financial support has been the key to their success – and MTF Finance has been there for over five decades, providing loans across agriculture, horticulture, and viticulture for Kiwis all over.

Whether it’s for a new ride-on, maintenance work on site, or a specialist piece of kit, loans can be a great way to get ahead in the sector.

And who better to talk to about just that than Sam Hamilton, who heads up MTF Finance Timaru and has been providing finance in Canterbury for years.

What’s an MTF Finance agricultural loan for?

The short answer? Anything. It all depends on what you’re hoping to achieve.

As Sam says, “For many of the people in rural areas, they want machinery to do a job well. That might be a new tractor or a second-hand Hilux – really, anything that’s going to be right for them. It’s all about reaching their goals.”

Here’s just a glimpse of what we’ve provided agri-loans for:

• Quad bikes, farm bikes, side-by-sides
• Silage wagons and trailers
• Tractors, trucks and utes
• Pasture metres
• Implements like forks and bailers
• Mowers and rakes
• Destoners, to remove rocks from soil
• Diversification of farm (e.g. mixing crops and pasture)
• And plenty more!

Getting started with a loan

The impact of a loan, however, can be huge. One recent client was looking for a unique bit of kit: a cow crusher, or mobile hoof trimming unit.

Plenty of farmers in Canterbury means plenty of cows and horses, and maintaining their hooves is important for their wellbeing and health. This presented a great opportunity for one client – but other lenders weren’t keen.

As Sam explains, “The cow crusher that he wanted was from an American manufacturer, who needed funding before they’d make this custom bit of kit; and secondly, he wanted to start a new business, and the other lenders turned their nose up a bit.”

But what was also clear was that there was no one else offering a cow crush, and that was meaning more lame cows – something that causes a lot of unnecessary stress for the cows and their farmers.

“Fortunately,” Sam adds, “his accountant could put together a clear cashflow, and we were able to say yes to him. Now he has a towable machine that he can take to farms. He’s working on building his presence and working with local vets to share his services – and we’re all benefiting from it.”

Plus, the deal was all done remotely; Sam and this client didn’t catch up in person until after the deal was completed. This is often a huge benefit to our clients, especially in the rural sector who would prefer not to drive an hour into town for a meeting.

“We’re able to advise them with loan structures and what we can do for them. Even knowing how to factor in GST helps with general money mindfulness"

A new way of living

As Sam points out, many people who reach out for a loan are in their first season and hoping to get started. Especially in Timaru, that means lots of contract and share milkers – so plenty of his unsecured loans are for the likes of quad bikes. “That seems to be the most common.”

What may be surprising is that many people looking for loans don’t come from farming backgrounds. Rather than having a family history in farming, instead, “it’s something they’ve picked up and come to love and enjoy” – something that often includes migrant workers looking to enter the industry, or families with growing kids. One family wanted to diversify their farm beyond dairy, so added in a strawberry farm and needed a destoner to clear the soil.

It’s really rewarding too, says Sam, when someone who started out as a dairy worker, and has come to us for equipment financing, later comes back because they’ve become a share milker and want to go further into the field. “We’re able to advise them with loan structures and what we can do for them. Even knowing how to factor in GST helps with general money mindfulness – and that’s a big deal. So we’re more than happy to help.”

When asked about the future of the industry and financing, Sam is optimistic. “When you’ve got the backing of an accountant, and the likes of DairyNZ providing support with things like forecasting, you’re in safe hands. Having the right specialty professionals is great, and it can really lift some of that burden.”