How to Get a Farm Loan in Australia: A Step-by-Step Guide

You’ve found the block. Maybe it’s 40 hectares of grazing country in the Riverina, or a cropping property your family has had its eye on for years. So you call your bank, but the answer isn’t what you expected.

That’s the reality for many buyers who assume rural property finance works the same way as a suburban mortgage. It doesn’t. Farms are assessed as commercial finance, and if you don’t know how to apply for a farm loan the right way, you can burn weeks chasing lenders who were never going to say yes.

Luckily, Australia’s farm sector is considered a sound lending bet. Farm debt hit a record $145 billion in 2024–25, and despite that growth, less than 0.1% of the nearly 147,000 farm loans currently in operation ended up in foreclosure or debt mediation last year. Rural property finance typically takes four to eight weeks from application to settlement, which is longer than a standard home loan, mostly because specialist valuations take time.

This guide walks you through exactly how to apply for a farm loan in Australia, from working out what you’re buying to settlement day.

Key Insights

• Farm loans are assessed as commercial finance. Lenders look at farm income (usually on an EBITDA basis), not just a payslip
• Most lenders want a 20–40% deposit, with 30%+ often needed for the best rates on farm purchases
• You’ll need 2–3 years of farm financials, tax returns, and a business plan if you’re expanding or starting out
• Government schemes like the RIC AgriStarter Loan can offer concessional rates for first farmers and succession arrangements
• A specialist rural broker shortens the path from enquiry to settlement by matching your property and income to the right lender the first time

What Is a Farm Loan and How Is It Different From a Home Loan?

A farm loan is finance secured against a working, income-producing agricultural property. Because the security is a business, not just a home, lenders assess it as commercial finance, and that changes almost everything about the application.

Farm Loan vs Rural Residential Loan vs Hobby Farm Loan

• Farm loan: Security is a commercial farming operation. Assessed on farm income and business viability.
• Rural residential loan: Assessed mostly on personal income (PAYG or business income). The property is primarily a home, with little or no commercial farming income.
• Hobby farm loan: Smaller acreage, lifestyle use, minimal farming income (a different lending category again).

Getting this distinction right before you apply for a farm loan is important. Apply through the wrong category and you’ll either get knocked back or offered a rate that doesn’t reflect your situation.

Why Lenders Treat Farms as Commercial Risk

• Income can be seasonal and tied to commodity prices, rainfall and livestock cycles
• There’s a narrower pool of buyers if a lender ever needs to sell the security
• Zoning, land classification and water entitlements affect long-term value
• Climate and drought risk are factored into both serviceability and pricing

Types of Properties That Typically Qualify

• Grazing and livestock properties
• Cropping and broadacre farms
• Horticulture, viticulture and orchards
• Dairy operations
• Mixed-use agribusiness land

How to Apply for a Farm Loan in Australia: Step-by-Step

Step 1: Define What You’re Buying and Why

Are you an owner-occupier, an investor, or expanding an existing operation? Will the property generate farming income, or is it mainly a home with some land attached? This decision shapes which loan category (and which lenders) are even relevant to your application.

Step 2: Check Your Eligibility and Serviceability

Lenders typically assess farm income on an EBITDA basis (earnings before interest, tax, depreciation and amortisation) rather than simple net profit. Off-farm income (PAYG wages, a partner’s salary) can strengthen your serviceability. Existing debts, credit history and living expenses are reviewed the same way they would be for any commercial loan.

Step 3: Save Your Deposit and Understand Your LVR

Deposit requirements for farm purchases generally sit between 20% and 40%, depending on the lender and property type, and a bigger deposit (30%+) tends to widen your choice of lender and improve your pricing. Some lenders will also lend against a combination of land, machinery, livestock and water entitlements rather than land value alone.

It’s worth noting that LVR on farm purchases tends to vary depending on how “single-purpose” the land is. A mixed grazing property with reasonable comparable sales nearby is a more straightforward proposition for a valuer than, say, a niche horticultural block with limited comparable transactions. The more specialised the land use, the more conservative most lenders get. So, if you’re buying into a smaller commodity category, it pays to budget for a larger deposit up front rather than assume you’ll get the same LVR as a standard cropping or grazing purchase.

Step 4: Gather Your Farm Finance Documentation

• Personal ID, proof of address and credit history
• Two to three years of farm financials, tax returns and BAS statements, where available
• Details of existing machinery, livestock, water rights and other security
• A business plan or cash flow forecast, if you’re new to farming or expanding

Step 5: Get Pre-Approval Through a Rural Finance Broker

This is where knowing how to apply for a farm loan properly pays off. Pre-approval gives you a realistic budget before you start bidding or negotiating on a property, and a specialist farm loan broker knows which lenders are actively writing rural deals for your region and commodity type right now.

Step 6: Get the Property Professionally Valued

Rural valuations need a specialist rural valuer, not a standard residential one. Expect valuation fees of roughly $2,000 to $6,000+, depending on the property’s size and location. In a rising market, valuations can come in below the contract price, so it’s worth factoring that risk into your offer.

Step 7: Submit, Negotiate Conditions and Settle

Your broker lodges the formal application and manages the conditions of approval. Allow four to eight weeks from application to settlement for most rural property finance, then coordinate with your solicitor or conveyancer and arrange insurance ahead of settlement day.

Eligibility Criteria Lenders Look At

Deposit and LVR Expectations

A 30%+ deposit is common for the most competitive pricing on a standard rural purchase. Remote, drought-affected, or single-use properties often have a lower maximum LVR. If you’ve got equity in an existing property, that can sometimes substitute for a cash deposit.

Income and Serviceability

Where seasonal variation exists, lenders will typically average income over two to three years, factor in add-backs for depreciation and non-cash expenses, and consider your combined farm and off-farm income together.

Security and Land Classification

Zoning, water entitlements, and access rights are all reviewed closely. Single-use or highly specialised land can attract a lower LVR, and environmental factors such as flood or bushfire risk can also affect terms.

Credit History and Existing Debt

A clean credit history strengthens every application. Existing equipment or livestock finance gets factored into your overall debt-to-income calculations, so it pays to have a clear picture of what you’re already carrying before you apply.

Documents You’ll Need to Apply for a Farm Loan

Personal Documents

• Photo ID (driver’s licence, passport)
• Proof of address (rates notice, utility bill)
• Bank statements (3–6 months, personal accounts)
• Details of other assets, liabilities and existing loans

Farm Business Documents

• Two to three years of farm financials and tax returns, where available
• BAS statements if registered for GST
• Livestock numbers, water entitlements, and lease agreements (if applicable)
• Machinery and equipment list with estimated values

Property-Specific Documents

• Contract of sale or proposed purchase details
• Title search and zoning information
• Any environmental or heritage overlays affecting the land

Before you submit, it’s worth double-checking that all documents are current (within three months), names are consistent across every document, and there are no unexplained gaps in your farm income history. Lenders notice, and gaps slow everything down.

Types of Farm Loans Available

Farm Purchase Loans

Used to buy an established agricultural property, typically structured as commercial finance secured by the land itself.

Farm Equipment and Machinery Finance

Farm equipment loans finance tractors, harvesters, irrigation systems and other plant and equipment. These are often structured as a separate, shorter-term facility to the land loan, so a header repair or a tractor upgrade doesn’t need to touch your main mortgage.

Agribusiness Loans

Agribusiness loans cover working capital and expansion finance for an existing farming business, and can include seasonal repayment structures aligned to harvest or livestock sale periods rather than a flat monthly amount.

Government and Low-Interest Rural Loans

The Regional Investment Corporation (RIC) offers concessional loans for eligible farm businesses, including the AgriStarter Loan for first farmers and succession arrangements. As of the most recent RIC rate review, the variable rate has been held at 5.18% since 1 February 2026, and last financial year, RIC customers saved an average of 2.26% in interest compared to their commercial bank loans. State-based schemes such as the NSW Rural Assistance Authority and QRIDA in Queensland offer similar support, though eligibility criteria vary by state and scheme.

Loan Type	Typical LVR	Indicative Rate Premium	Best For
Major bank farm loan (full doc)	60–70%	Standard commercial rates	Established operations with full financials
Non-bank/specialist rural lender	60–70%	+0.5–1.5% vs major bank	Complex structures, faster turnaround
Farm equipment finance	Asset-secured	Varies by asset type	Machinery, vehicles, irrigation
Government/concessional (e.g. RIC)	Scheme-dependent	Below market (where eligible)	Drought, disaster recovery, first-generation farmers

How Much Can You Borrow?

Borrowing Power Factors

• Property value and the LVR your lender will offer
• Farm income (EBITDA-based) plus any off-farm income
• Existing debt against machinery, livestock or other land
• Deposit size and any equity available from an existing property

Example Scenario

A mixed grazing property valued at $1,200,000, with a 35% deposit or equity contribution ($420,000), might see an estimated borrowing capacity of $700,000–$780,000 depending on serviceability and the mix of security offered.

Common Mistakes When Applying for a Farm Loan

• Approaching only major banks before exploring specialist rural lenders
• Underestimating rural valuation timeframes and costs
• Not separating farm and personal finances in bank statements
• Applying before gathering at least two years of farm financial history
• Ignoring water rights, access and zoning issues until late in the process
• Signing a contract before pre-approval, which leaves you negotiating from a weaker position if finance falls through
• Assuming last year’s figures alone tell the whole story. Lenders want to see a trend, not a single good (or bad) season

The pattern behind most of these mistakes is the same. Treating a farm purchase like a standard property transaction and working out the finance details afterwards. Farms move on rural timeframes, not suburban ones, and getting your documentation and lender research sorted before you’re under contract gives you far more room to negotiate on price, on settlement terms, and on the loan itself.

Why Work With a Rural Finance Broker

Farm loans are assessed as commercial finance, not standard home loans. Most lenders want a 20–40% deposit and two to three years of farm financials, and specialist rural lenders and government schemes can fill the gaps that major banks won’t touch.

Rural property doesn’t fit a one-size-fits-all lending box, and that’s exactly why farm buyers benefit most from a broker who understands agriculture, not just mortgages. A rural finance broker knows which lenders are actively writing deals for your commodity type and region, which saves you from applying blindly.

Selectabroker connects you with brokers who specialise in rural and agribusiness lending – people who often understand the seasonal realities of farming firsthand. You get access to 40+ lenders, including major banks and rural specialists, guidance on structuring land, equipment and working capital finance together, and there’s no cost to you – lenders pay the broker, not the borrower.

Ready to move forward? Get a free farm loan consult with Selectabroker and find out exactly how to apply for a farm loan that fits your operation.