Clients who are contemplating the purchase of a new property (or addition to an existing block) regularly use IMAG to ascertain if the purchase is suitable. The following aspects are often examined:
- Soil type (usually including some soil testing)
- Rainfall environment
- Pasture base (and cost of any necessary renovation)
- Infrastructure (dwellings, fencing, yards, water & other improvements)
- Plant (if sold with property – if not, what will be required)
- Stock (if sold with property – if not, what purchases will be necessary)
- Potential returns given average seasons and good management
- Finance requirements (if necessary)
Some or all of the above are examined, depending on the depth of information required by the client.
Particularly at times of purchasing properties and environmental extremes (such as drought), many clients often seek advice as to which enterprises they should be involved in. IMAG can perform audits of the skill and resource base, and factor in predicted market conditions and risk exposure, to determine which industries the business should target. Whilst this often forms part of a larger, whole business plan, partial analysis can provide useful information on relative profitability.
Most of the processes involved with farm finance involve a considerable degree of complexity in an area in which many owners and managers have little experience. It is also unclear to many rural borrowers what a reasonable interest rate should be for the type of facility they have and many are unaware that some financial institutions are more competitive on some financial products than their competitors.
IMAG has recognised the need that many clients have in this area and so have developed processes to assist in the areas of obtaining new finance, refinancing existing loans and interpretation of finance offers. This can range from items as small as equipment finance to complete business (re)financing of existing facilities or for business growth and development.
The normal process for examining finance options involves gaining a comprehensive understanding of the business seeking finance. This will involve preparing budgets to determine if the business is capable of servicing the debt to be financed and to give the client a thorough understanding of their risk exposure. By discussing the farming operation an understanding can be gained of the type of finance facilities that would best suit the business.
IMAG then compiles a report outlining the asset base, estimated profitability and the finance required. This is submitted to various finance institutions with a request for them to offer suitable finance facilities. IMAG then sits down with the client to explain what the various offers entail and helps to negotiate with the bank if necessary. The service is completely independent and IMAG does not receive any incentives from any financial institutions.