FAQ’s – your questions answered

StockCo prefers to provide livestock finance facilities to clients that satisfy the following criteria:

• Existing livestock producer (pastoral property or feedlot) with greater than 3 years experience.
• Own existing livestock producing property, but can also have other leasing or agistment arrangements.
• Are experienced in conducting the livestock trades proposed.

• We take security directly over the livestock. We register our interest in the livestock on the Personal Property Security Register.
• We also track livestock movements via the National Livestock Identification System Database.
• Additionally, we require guarantees to be provided by the owners of major assets, if this is a different person or entity to the borrower.

• StockCo is not a bank.
• Our strategy is to enhance your relationship with your existing bank, by providing an opportunity for you to generate greater returns from your existing livestock business, without impacting your existing arrangements with your bank.
• We do this by taking direct security over the livestock we fund and by taking guarantees from major asset owning people or entities.
• In most cases we do not register a following mortgage and so this does not disrupt your existing security arrangements with your bank.
• We may reserve the right to take a mortgage if you default on your commitments with StockCo.

• We have a preferred minimum limit of $250,000, although we will consider applications for smaller amounts where there are reasonable prospects to grow over time.
• There is no maximum facility limit. StockCo has engaged in a number of transactions greater than $10 million.

• You can apply by completing our online application form or download a form from our documents page.
• You can lodge your application with any of our approved distribution partners (provide link) or directly with StockCo.
• In most cases we will visit you on farm to ensure we have a thorough understanding of your business and your goals.

• Generally StockCo will provide a decision on applications within 2 business days of receipt of all necessary information.

• Once your application is approved we aim to have loan documents to you within 2 business days.
• You are able to commence trading as soon as we receive properly executed documents and have completed our security registration.

• Our Purchase and Sale Instructions are contained in the document section of this website

• Yes, we will advance funds against livestock you already own, so long as they are intend for sale within 12 months.
• In most cases your existing livestock will be captured by your bank’s security and we will require a release from any security holders before we can advance funds against existing livestock.

• You can pay out your obligations to StockCo at any time with no penalties. Once the StockCo facility is finalised ownership of the livestock transfers to you.

StockCo purchases the livestock on the producer’s behalf, or from the producer, through settlement of an invoice and therefore StockCo owns the livestock. The livestock is then bailed to the producer for them to farm. StockCo receives a fixed return based on the financing agreement in place with the producer and all surpluses from the sale of the stock belong to the producer

As StockCo owns the livestock it is not recorded in the producer’s balance sheet of their accounts. Similarly, there is no livestock loan to account for. This means that there is no need to account for the value of livestock or any changes to those values in the producer’s accounts or tax returns and therefore simplifying the accounting and tax. There is also no interest charge to account for or accrue during the term of the financing in the accounts of the producer.

When the livestock is sold or slaughtered StockCo receives the proceeds directly. StockCo then deducts the purchase price of the livestock and any finance costs. The balance is paid out as a margin to the producer and ordinarily at this point it would be recorded as income to the producer. Producer’s do not ordinarily accrue the grazing income into their accounts during the term of the finance as the amount of income they will receive and when is not known.

As StockCo owns the livestock which is bailed to the producer, the amount due to the producer is essentially a grazing payment. The finance charge (sometimes referred to as interest or an interest rate for understandability or comparability) is simply part of the method of calculating the grazing payment to the producer as a deduction from the net proceeds on the sale of the livestock. E.g. Sale price – purchase price – finance charge = grazing payment due to the producer.

The calculation is done exclusive of GST and then if the producer is GST registered GST is added to the payment. The net result for the producer is no different to an ordinary loan with a comparable interest rate.

In addition to the reporting provided to the producer for each transaction (each purchase and sale of livestock) StockCo has available a number of period transaction and balance reports that are able to assist with the compilation of year end accounts and analysis of performances.

The responsibility for deaths is that of the producer, the same as if they had taken a normal loan to purchase the livestock. StockCo will simply account for deaths when calculating the payment of the producer’s net margin (i.e. reduce the “grazing payment” for the deaths).

We appreciate that farming livestock is not a lineal process and that sometimes stock may take longer to grow to their target weights. It is often beneficial for producer’s to hold their livestock for a longer period in order to maximise their returns and so the lending term can be extended to cater for this as per the terms of the financing arrangement.

No. Although StockCo settles the full invoice including any GST, finance costs are only charged on the GST exclusive amount.