Farmers affected by floods facing loan difficulty or default could ask their bankers to give them 1 year’s complete repayment holiday followed by 2 years of interest only payments to aid recovery. That should be put in a formal letter of variation signed by the bank and borrower which does not vary any other term or the previous loan agreement.
Borrower Beware – one bank, in making a variation put a clause in the middle of the variation agreement reducing the term of the loan from 15 years to 15 months, spelling disaster for the farmers. Never trust the bank!
Bank multi-billion-dollar profits can well afford to support flooded farmers. In fact all farm loans should have a clause that allows a similar repayment variation after any flood, fire or drought with a proviso that every quarter of the loan term ( 4 years in a 16 year loan, 7 years in a 28 year loan) the scheduled repayments must have been made. That gives farmers flexibility in bad times and allows them to make it up in good times, whilst keeping the bank happy that the loan will be fully repaid on time.
Under no circumstances should any flood-affected farmers let the bank sell them up because they cannot make loan repayments on time.
If they try give me a call at GBAC on 0248417496.