The short term livestock finance marketplace is getting busier with former StockCo senior management launching their own rival finance provider to buyers of cattle, sheep and goats.
Legacy Livestock is promising a specialist loan service offering $250,000, or more, without the lender requiring security over a producer's real estate assets.
Led by prominent Queensland agribusiness name and cattle producer, Richard Brimblecombe, Legacy is funding the full cost of short term livestock acquisitions, such as young stock bought for fattening, or stock acquired to take advantage of short term herd or flock expansion opportunities while seasonal conditions are good.
Although not tied to mainstream finance providers or the selling agency majors, Legacy does have an eye to potentially partnering with independent agents to help bolster their options for producer clients.
Legacy's loan arrangements ensure buyers keep ownership of their livestock.
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Although similar, its finance product differs from StockCo's bailment model, which effectively surrenders ownership of purchased livestock to the financier during the term of the deal.
This arrangement has its detractors because it may turn out cumbersome and involve GST hurdles if buyers want to repay the financier for all or part of their purchase before the stock are sold back into the open market, a feedlot or meatworks.
The appetite for specialist livestock finance arrangements has been growing in the lending market for more than a decade, with active players including the major agribusiness banks, farm services companies Elders and Nutrien Ag Solutions, StockCo (acquired by New Zealand's Heartland Bank in June), and some independent selling agents.
Growth options
Legacy, which launched last month, also has its sights set further down the track on servicing the crop inputs market, although for the moment it is concentrating on livestock sector opportunities in eastern Australia.
The Brisbane-based lender is about to appoint a regional representative on the South Australia-Victorian border, with more similar positions to be created this year.
Key personnel in the new lending business include recent StockCo director and one time chief executive officer, Mr Brimblecombe; former StockCo credit specialists, Andrew Moyes and Abbey Britt-Keen, and former North Australian Pastoral Company chief financial officer, Sophia Beneditti.
Now Legacy's managing director, Mr Brimblecombe's career has spanned a regional management role at Suncorp; grower services manager at Namoi Cotton, northern Australia divisional boss at Landmark (Nutrien); a Top End agribusiness banking leadership job at Commonwealth Bank, and a directorship on the Grains Research and Development Corporation.
Last year he stepped down from a plum job as NAPCo chief executive officer to start raising equity and debt funding to build the Legacy Livestock business.
"With a team deeply entrenched in all things agri finance, Legacy Livestock will nurture the growth potential of this multibillion dollar (livestock) industry," he said.
The reality for many progressive producers, particularly family enterprises, was their earning potential was constrained because they were not comfortable with current loan products, or able to access the right funds to run their operation at full capacity.
Sale day repayments
"At the end of the day, it's about healthy profits come sale time, which is why we don't require payment until the agreed sale date," Mr Brimblecombe said.
Loans terms of six to 12 months are based on the benchmark BBSW short term money market interest rate, with a margin of between 7.5 per cent and 10.5pc, depending on the borrower's financial position.
"We sit down and develop an understanding of the business and the loan required before setting the figure," he said.
Security over loans is ensured via Legacy submitting a registration to the Personal Property Security Register, rather than requiring a mortgage over any real estate assets.
Mr Brimblecombe, who also runs an Angus beef enterprise at Glenmorgan on the Darling Downs, felt Legacy was in a good position to grow mutually beneficial partnerships with independent rural agencies and their client base by offering "more considered livestock finance and lending products".
"We're offering flexible finance that does not disrupt a producer's relationship with their bank or complicate the ownership of their livestock."
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Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
