National
Farmer’s
Choice
Providing you with the options
to grow your business
Want a loan that fits your needs?
Now you have the option
What do you need from your bank? Cash for reinvestment? A little bit extra to kick-start
your operation? Do you want to pay off your loan gradually or in predetermined stages?
National Farmer’s Choice is a package of a range of business lending products together
with a Farm Management Account (which may function as an overdraft) designed to fit
your business needs1. It is designed specifically for Australian farmers:
• who have a minimum average annual farm gross income2 of $300,000 for each of the
last three years,
• who are able to demonstrate a track record of sound financial performance and
management;
• who can provide acceptable rural property or term deposit security3; and
• who meet the required credit assessment criteria.
Farmer’s Choice uses a Maximum Aggregate Borrowing Limit (Package Limit)4 as well as
limits on each lending product within the package. This provides you with a better
understanding of your total debt position and can help you to manage this debt in line
with your cashflow.
It gives you four repayment options5. What’s more, you can choose to include products
with a fixed, variable, capped or range rate interest rate structure6. You also have the
flexibility to make lump sum repayments if you like7, and you can redraw up to the
approved Package Limit once a year without incurring any additional fees.
That’s the beauty of Farmer’s Choice – it’s whatever suits your requirements.
Save on fees and interest rates
As part of Farmer’s Choice the following benefits apply:
• One annual fee of $500 covering all term lending and overdraft products
included in the package
• No loan service fees8 while you have a Farmer’s Choice package
• No overdraft line service fees
• No annual facility fee on your nominated Farm Management overdraft
• Reduced Variable Interest Rates and Application Fees.
1. Fees and charges are payable. Normal lending criteria, security requirements and terms and conditions apply. Not all lending products can be part of a Farmer’s Choice
Package. Full details are available on request. 2. Excludes revenue from sale of capital items. 3. Not applicable to Milestone Option. 4. The Package Limit is the total of the
limits on each packaged lending product excluding overdrafts. 5. The repayment option and terms available depend on the customer’s financial performance and strength and
type of security given. 6. Capped and range rate only available for bill facilities of $500,000 or more. 7. Economic costs may be payable. 8. Bill facilities included as part of this
package will attract a separate bill drawdown fee and Bill Facility Fee.
Interest Only option
Who it is for? Interest Only option is for farmers who want to invest any surplus cash back
into their business instead of paying back their loan principal. This option allows customers
to maintain term borrowings at a fixed amount instead of amortising the loan over a 15
year period.
When would you consider it? This option may be suitable for farming operations that
receive a return on their investment greater than the cost of their debt and are comfortable
keeping debit levels steady rather than undertaking a structured debt repayment program.
Option characteristics:
• Acceptable broadacre property and/or term deposit security required.
• Maximum of 15 year term
Example
No amortisation required
Loan amount
$850k
0
1
2
3
4
5
6
7
8
9
10 11 12 13 14 15
Step Down to Interest Only option
Who is it for? This is the option for farmers who need cash up front to buy machinery,
stock or land – or need a cash flow injection after suffering difficult production conditions.
When would you consider it? This option may be suitable if you need working capital,
you need to get your operation on track or a new venture started by allowing you to
borrow above the agreed Interest Only option Package Limit for a period of no more
than five years. After the initial five year period, there is a requirement to bring the
Package Limit in line with what would be allowed under the Interest Only option.
Option characteristics:
• Acceptable broadacre property and/or term deposit security required.
• Maximum of 15 year term
Example
Step Down &
Review Anually
$1m
No amortisation required
Loan amount
$850k
0
1
2
3
4
5
6
7
8
Years
9
10
11
12
13
14 15
Milestone option
Who is it for? This option is available to all farmers who want to set up a structured debt
reduction program with the view to repaying your packaged loans over a set time period.
When would you consider it? The Milestone option is all about setting milestones and
reducing the original Package Limit in set stages. For terms of five years or less, the
Package Limit must be reduced to zero at the end of the term and for terms greater than
five years, the Package Limit reduces in line with the following milestones:
• To 80% of the original Package Limit within the first 1/ 3 of the package term;
• To 40% of the original Package Limit within the first 2/ 3 of the package term; and
• To zero at the end of the package term.
Option characteristics:
• Maximum of 15 year term
Example
Step Down to 80% of
the original package
limit within 33% of
package term
$1m
Loan amount
$800k
Step Down to 40% of
the original package
limit within 66% of
package term
$400k
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14 15
Years
Long Term Repayment option
Who is it for? The Long Term Repayment option is for farmers who are looking to reduce
their debt and pay off their loan gradually over a predetermined period of up to 25 years.
The Package Limit is fully amortised over the period.
When would you consider it? This option could be the right one for you when you are
looking to make regular structured repayments to reduce your packaged loans over a set
period of time. This could save you money on interest payments.
Option characteristics:
• Acceptable broadacre property and/or term deposit security required.
• Maximum of 25 year term
$1m
Example
Loan amount
$800k
The original package limit
is amortised over 25 years.
With payments (principal & interest)
being either Monthly, Qtrly or Half Yearly.
$400k
Reduce to NIL
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Years
The National have over 530 dedicated National Agribusiness Managers in over 110 regional locations
throughout Australia which means help is always close at hand. These specialists are focussed on
providing you with a financial strategy to suit your individual needs.
If you’d like to discuss how the National Farmer’s Choice can benefit your business contact your
National Agribusiness Manager or call 13 10 12.
Important Information: Information in this brochure is current as at November 2004. Any advice in this brochure has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice in
this brochure, the National Australia Bank Limited recommends that you consider whether it is appropriate for your circumstances. The National recommends that you consider the Product Disclosure Statement, or other disclosure
documents available from the National before making any decisions regarding National's Farm Management Account. The National Farm Management Account is issued by National Australia Bank Limited ABN 12 004 044 937.
© 2004 National Australia Bank Limited ABN 12 004 044 937 AFSL 230686 401-592 (10/04)