Agi-Loan Business Plan

ShowMeTheCash

I am looking to apply for an Agi business loan, as part of the loan I need to provide essentially a business plan.


Does anyone a template to what this needs to include?


I will be new to farming so trying to put together something sensible.


Thanks

jd_12345

I don’t have any template but in my opinion better off getting an advisor to do it up for you to give you the best chance possible. Get onto Teagasc or else look up the Agricultural Consultants Association to find a local advisor. They’re doing them everyday of the week

ShowMeTheCash

jd_12345 wrote: »

I don’t have any template but in my opinion better off getting an advisor to do it up for you to give you the best chance possible. Get onto Teagasc or else look up the Agricultural Consultants Association to find a local advisor. They’re doing them everyday of the week

Thanks I will get the ball rolling.

lakill Farm

to do the financial projections your looking at approx 15 pages.


on top of that its about including what the banks will require and knowing what they require , what else they will require before being asked so as to streamline the process and it indicates to the bank you have done all your due diligence and research


Last 3 packs I have submitted all in 2021

• pig farm 120 pages 350k facility - approved & drawdown
• beef farm 101 pages €80k facility - approved & drawndown
• dairy farm 103 pages 120k facility - with bank at final stages of legal

(previously had been submitted by an ag consultant and decided)


your looking at 8/12 hours work with having all the templates set up together with hours of ongoing correspondence with the farmer and facility providers

ShowMeTheCash

lakill Farm wrote: »

to do the financial projections your looking at approx 15 pages.


on top of that its about including what the banks will require and knowing what they require , what else they will require before being asked so as to streamline the process and it indicates to the bank you have done all your due diligence and research


Last 3 packs I have submitted all in 2021

• pig farm 120 pages 350k facility - approved & drawdown
• beef farm 101 pages €80k facility - approved & drawndown
• dairy farm 103 pages 120k facility - with bank at final stages of legal

(previously had been submitted by an ag consultant and decided)


your looking at 8/12 hours work with having all the templates set up together with hours of ongoing correspondence with the farmer and facility providers

My plan is pretty simple.
Small amount of sheep and maybe some forestry.


I do not need the farm to run a profit, I do not even need the farm to cover the loan repayment.


The farm in the scheme of my earnings is a pretty small financial project, had I 18 months for the land purchase I would not need the bank at all. The land just came up at a time where I have the opportunity to essentially buy back the ancestral farm.


It seems like a lot of work for the bank to essentially loan me 9 months salary!

emaherx

ShowMeTheCash wrote: »

My plan is pretty simple.
Small amount of sheep and maybe some forestry.


I do not need the farm to run a profit, I do not even need the farm to cover the loan repayment.


The farm in the scheme of my earnings is a pretty small financial project, had I 18 months for the land purchase I would not need the bank at all. The land just came up at a time where I have the opportunity to essentially buy back the ancestral farm.


It seems like a lot of work for the bank to essentially loan me 9 months salary!

Application declined

I think you will need to show potential for the farm to make profit, otherwise it's a personal loan you will be looking at with different interest rates.

ShowMeTheCash

emaherx wrote: »

Application declined

I think you will need to show potential for the farm to make profit, otherwise it's a personal loan you will be looking at with different interest rates.

I did ask the question around a personal loan and was told that a farm falls under the business loan. Granted the business loan has better rates which is really I needed to know.



I just need a plan that covers what the bank would require to process the loan. I need to to look good and feasible.



The execution of the plan however will only happen if it does not interfere with my day job which is essentially what will bank roll the entire project. It would be nice to turn a profit (I actually have a pod camping idea that I think could be a more profitable venture) but that would have a lot dependent upon planning etc... I need to make the purchase first and have a feasible plan to do that.

Ultimately the farm as is, is a small sheep farm.
Realistically years 1 - 3 I might get to a point there the sale of sheep/lamb product might cover the cost of a loan.

ShowMeTheCash

emaherx wrote: »

Application declined

I think you will need to show potential for the farm to make profit, otherwise it's a personal loan you will be looking at with different interest rates.

Spoke to the bank this morning, my PAYE will cover the terms of the loan so that should not be an issue, it would be approved in the basis of that alone.


I just need to show the business intent.
Technically I could say I am planting trees and see a return in 15 years.

lakill Farm

You will have no problem doing that so

ShowMeTheCash wrote: »

Spoke to the bank this morning, my PAYE will cover the terms of the loan so that should not be an issue, it would be approved in the basis of that alone.


I just need to show the business intent.
Technically I could say I am planting trees and see a return in 15 years.

lakill Farm

" My plan is pretty simple.
Small amount of sheep and maybe some forestry."


A plan a maybe isn't a plan


You will still need to do projects so before you do the projections decide if forestry is in the plan or not

ShowMeTheCash wrote: »

My plan is pretty simple.
Small amount of sheep and maybe some forestry.


I do not need the farm to run a profit, I do not even need the farm to cover the loan repayment.


The farm in the scheme of my earnings is a pretty small financial project, had I 18 months for the land purchase I would not need the bank at all. The land just came up at a time where I have the opportunity to essentially buy back the ancestral farm.


It seems like a lot of work for the bank to essentially loan me 9 months salary!

ShowMeTheCash

lakill Farm wrote: »

" My plan is pretty simple.
Small amount of sheep and maybe some forestry."


A plan a maybe isn't a plan


You will still need to do projects so before you do the projections decide if forestry is in the plan or not

The upper fields would required probably too much work to get them workable for sheep.


I reckon there is at least 5 acres of forestry.
There are a number of wood land schemes and grants I will look into for that.

Mooooo

Forestry can reduce the value of the land, if it is not priced at forestry level already, so if it's being used as security it will have a lower value. Don't underestimate costs either. If you can cover it with your job you should be fine but at the same time may as well make sure there is some return on it
Edit the last part above is more for yourself than the bank

ShowMeTheCash

Mooooo wrote: »

Forestry can reduce the value of the land, if it is not priced at forestry level already, so if it's being used as security it will have a lower value. Don't underestimate costs either. If you can cover it with your job you should be fine but at the same time may as well make sure there is some return on it
Edit the last part above is more for yourself than the bank

Talking on another poster on another thread someone did post the average margin per hectare in sheep farming in 2019.
Which for 20 acres would run at about 3500...
The plan needs to make fiscal sense in that I cannot keep more sheep than the land can hold and I need to show that the numbers fall in line with what is already known in terms of national averages.


I am pretty sure if my plan is suggesting I can make x2 or x3 or x4 the nation average then I am sure someone is going to call BS on the plan. Unless I have some magic formula up my sleeve