Negotiating with Creditors and Lenders: 5 Steps and a Checklist to Get Ready
It's been a difficult stretch for many farm businesses across NSW. Three interest rate rises through 2026 have pushed up loan repayments right as many producers are also managing dry seasonal conditions in parts of the state and persistently high input costs - fuel, fertiliser and fodder among them. For some, that combination is starting to show up as genuine cash flow pressure.
If that's where you're at right now, you're not alone, and dealing with creditors and lenders can feel overwhelming, especially on top of everything else on your plate. In these situations, negotiating payment terms or restructuring loans is often essential to keep debts manageable and sustainable.
The good news is that many creditors and lenders are willing to work with you, if you approach them early and with a clear plan.
Steps to Take When Negotiating
1. Act early
Don't wait until you've defaulted on payments. As soon as you know you may struggle to meet an obligation, contact your creditor or lender. Early communication shows responsibility and increases the likelihood of a positive outcome. Keep in mind that assistance from a bank can take longer than expected, so it's worth engaging a rural financial counsellor early too.
2. Be honest
Explain your financial situation openly, including the challenges you're experiencing - be specific about what's gone wrong and the likely short and long-term impacts until you're back to full production. Transparency helps build trust and demonstrates that you're seeking solutions, not avoiding the problem.
3. Prepare information
Before you start discussions, gather up-to-date records of your income, expenses and debts. Accurate financial details make negotiations more productive and show that you're well-prepared. (See the checklist below for exactly what to have on hand.)
4. Propose solutions
Go into discussions with practical ideas, such as adjusted payment plans or extended timelines based on your cash flow. If ongoing assistance is likely to be needed, it's worth having a plan B, such as asset sales for debt reduction, ready as a discussion point. Realistic, achievable proposals give lenders confidence.
5. Get it in writing
Once new arrangements are agreed upon, always request written confirmation and keep records of any meetings or discussions. This protects you from misunderstandings and ensures everyone is on the same page.
What to Have Ready
Walking into these conversations prepared makes a real difference; it saves time, builds credibility with your lender, and helps you get to a workable outcome faster. Before you sit down to talk, it's worth gathering:
• Last three years' business and personal financial statements
• Last three tax returns
• Council rates notices
• Local Land Services (LLS) rates notices
• LLS Stock and Land notice
• Details of any loans, including balance owing, interest rate and repayments
• An overview of your enterprises e.g. livestock numbers, lambing percentage, ballpark income estimate for the upcoming financial year, and future plans
• A list of any other creditors you owe money to (e.g. input suppliers, equipment finance, agistment, credit cards)
• Current insurance certificates
• A succession plan if available or an outline of a plan forward
• Your current taxation position - up to date, behind, or on a repayment plan
To make this easier, we've put together a free, printable checklist with a tick-box for each item so you can work through it at your own pace and know you've covered everything before you pick up the phone.
[Download the checklist here]
You Don't Have to Do This Alone
At RFCS NSW, we understand how stressful financial challenges can be. Depending on your circumstances, our rural financial counsellors can support you well beyond that first conversation - recent work with clients has included refinancing, farm debt mediation, and asset management, alongside guidance on negotiating directly with creditors and lenders. Our free, confidential and independent financial counselling services are here to help. Get in touch with your local rural financial counsellor to discuss your individual options and take the next steps toward financial stability.
1800 319 458 | rfcsnsw.org.au