We would only have this information available from an AMC’s perspective and not industry-wide which may not be a true reflection. The main reason for applications to be rejected is serviceability of the loan.

Most banks can offer unsecured loans, but the interest rates will be higher than secured loans to take account of the risk involved. Unfortunately, the AMC do not offer unsecured loans.

It certainly is a bigger consideration now when looking at new applications as we can see how the reductions will affect the bottom line of the accounts. AMC do not have annual meetings with their customers unlike other lenders except when issues start to arise. Farmers are innovative and we hope are making plans to mitigate against any impacts.

It would depend on what your current overdraft interest rate is and what your future plans are. It is important to protect cash flow as the phrase “asset rich, cash poor” often is referred to by farmers. Some businesses would have a core overdraft, being the level that the overdraft does not fall below. Depending on rates, it may be more economic to move this core element onto a loan and keep the overdraft to buy cattle. However, you wouldn’t want the bank to subsequently reduce your overdraft below a point that would facilitate the expansion in cattle numbers. Overdrafts tend to be more expensive than loans, but they serve a purpose if used in the right way.

AMC had a record year in 2020 but whether it is Covid-related, we are unsure. Parts of the agricultural industry were relatively unaffected by the pandemic whereas other parts were significantly impacted. Bounce back loans offered by the government through banks have generally distorted loan statistics.