Australian wheat growers now have access to four new financial products from AWB, offering growers greater choice, cashflow certainty and the convenience of dealing with AWB.
AWB Managing Director, Andrew Lindberg, said the development of the new financial product range was a result of listening and responding to growers and their business requirements.
Mr Lindberg said AWB National Pool payment options significantly increased flexibility for growers, with the introduction of two loans and two payments, through which growers select the timing and quantity of their cashflow.
"AWB has researched extensively and worked closely with growers to develop the products they want, and we are now confident we have a range of financial products that will meet the vast majority of growers’ financial requirements," Mr Lindberg said.
"Our new payment options provide growers with greater control over their cashflow, with the ability to manage the timing and method of payment from the moment the grain is delivered.
"And by choosing AWB payment options, Australian growers will continue to have access to competitive financial products with the convenience of dealing with AWB," Mr Lindberg said.
The four new AWB National Pool payment options are:
Harvest Loan - an improved version of the popular Harvest Payment, with majority of cashflow at harvest via a loan based on 90% of nominated Estimated Pool Return (EPR), less estimated costs
Advanced Payment - majority of cash at harvest in the form of a payment
Deferred Payment - majority of cash in July, with some at harvest for working capital.
Flexible Drawdown Loan - establishes a credit limit based on 90% of nominated EPR, less estimated costs, with a minimum of 20% of the limit automatically drawndown at harvest, and the ability to draw against the remainder as required.
All four products are non-recourse. A non-recourse loan means that if the distributions from the AWB National Pool do not repay the loan, the grower will not be required to make up the difference. A non-recourse payment means growers can keep any part of the payment they receive. In effect, this non-recourse feature provides growers with a guaranteed minimum amount.
The Harvest Loan and Flexible Drawdown Loan are loans, and therefore not subject to GST. Growers will incur a GST liability when AWB National Pool distributions are used to repay the loan. We suggest growers set aside funds to meet these obligations as they occur. The Advanced Payment and Deferred Payment products are payments for grain delivered and therefore subject to GST. Growers will incur a GST liability when they receive the payment.
Mr Lindberg said with the introduction of two loans and two payments, growers can choose to have the majority of their cashflow either at harvest, in July following harvest, or as they need it.
"AWB National Pool payment options are available to all wheat growers, for all pool pay grades, and on any amount or quality of grain delivered," Mr Lindberg said.
"Growers who use AWB products do not require any third party involvement, they simply deliver to AWB where they have the freedom to choose their payment option load by load, and can use a single option or a combination of loan and payment products.
"With the difficult season many are facing, AWB is pleased to be able offer growers increased choice and flexibility, and the cashflow certainty the new products will provide," Mr Lindberg said.
Growers will receive further information on AWB’s product range in coming months.