Overdraft

J

Jdunn55

Member
Location
Helston, cornwall
I've finally finished cash flows

I'm happy with them, and looking at them I'm really surprised at how well things should look in 12-18 months time. I've been extremely hard on the figures, milk price is in at 32ppl and costs are all over the top rather than under.

However, there's a period over the next 6-9 months which isn't very good at all.
I need a cash injection in the form of a very large overdraft increase in an ideal world to be able to survive.

My financial year is April 1st - march 31st.
By the end of march 2025 I should have paid off 90-95% of the overdraft increase and be back to where I am now, by April 2026 I should be cash positive and making money.

The question is, will the bank be happy with that and allow me a larger overdraft than they would normally like as within 18 it can go back to where it is now?
What is the maximum a bank would normally like to work with, in my head it's 4 months milk cheque?
The increase would take my overdraft to 4 months milk cheque for the next 12-15 months when it would drop to about 3 months milk cheque
Then after another 6 months down to 2 months, then 1 month etc etc

Or do I try and put it on a loan, would they go for that?
 
Martyn

Martyn

Member
Location
South west
I don’t know but we have always worked upto 1 months milk cheque and if more is needed then a loan is used, add in buggger up factor and the fact you have to pay annual overdraft fees, taking the strain off a bit and double the time you expect to pay it back
 
W

Werzle

Member
Location
Midlands
No idea but its alot easier to increase an OD if your not overdrawn at the time of asking. Sounds like you would be better off putting your debt on a loan as OD's arent for longterm borrowing.
 
U

upnortheast

Member
Livestock Farmer
Location
Northumberland
Jdunn55 said:
I've finally finished cash flows

I'm happy with them, and looking at them I'm really surprised at how well things should look in 12-18 months time. I've been extremely hard on the figures, milk price is in at 32ppl and costs are all over the top rather than under.

However, there's a period over the next 6-9 months which isn't very good at all.
I need a cash injection in the form of a very large overdraft increase in an ideal world to be able to survive.

My financial year is April 1st - march 31st.
By the end of march 2025 I should have paid off 90-95% of the overdraft increase and be back to where I am now, by April 2026 I should be cash positive and making money.

The question is, will the bank be happy with that and allow me a larger overdraft than they would normally like as within 18 it can go back to where it is now?
What is the maximum a bank would normally like to work with, in my head it's 4 months milk cheque?
The increase would take my overdraft to 4 months milk cheque for the next 12-15 months when it would drop to about 3 months milk cheque
Then after another 6 months down to 2 months, then 1 month etc etc

Or do I try and put it on a loan, would they go for that?
Click to expand...
Get on the phone to your bank manager and show him your predictions & explain your situation
He / she will be impressed you are highlighting a problem 6 months down the road. & will let you know what they are prepared to do.
If you don`t like what they say you still have time to look at other options
Difficult for us to advise as we don`t know what other financial liabilities you have
 
L

livestock 1

Member
Jdunn55 said:
I've finally finished cash flows

I'm happy with them, and looking at them I'm really surprised at how well things should look in 12-18 months time. I've been extremely hard on the figures, milk price is in at 32ppl and costs are all over the top rather than under.

However, there's a period over the next 6-9 months which isn't very good at all.
I need a cash injection in the form of a very large overdraft increase in an ideal world to be able to survive.

My financial year is April 1st - march 31st.
By the end of march 2025 I should have paid off 90-95% of the overdraft increase and be back to where I am now, by April 2026 I should be cash positive and making money.

The question is, will the bank be happy with that and allow me a larger overdraft than they would normally like as within 18 it can go back to where it is now?
What is the maximum a bank would normally like to work with, in my head it's 4 months milk cheque?
The increase would take my overdraft to 4 months milk cheque for the next 12-15 months when it would drop to about 3 months milk cheque
Then after another 6 months down to 2 months, then 1 month etc etc

Or do I try and put it on a loan, would they go for that?
Click to expand...
Give them working accounts up to date if you can and if they are good enough. Get them out and shift some od onto a loan at least the consolidated bit you can’t shift and some more (if you have that) Fix it for the short term and renegotiate in 2 years time for a better rate. You can only do this if there’s enough profit available. They might put od up for the short term but see how it goes
 
L

livestock 1

Member
They don’t like od’s as they have to hold money for them. They don’t for loans. Don’t think they have much spare at the moment they got caught up in the CreditSwiss thing and lost out a bit so been asked to square up there balance sheets
 
PI Stsker

PI Stsker

Member
Mixed Farmer
Location
South West
I’ve always gone with the thinking that if you can’t pay an overdraft off in a FQ then it probably should be financed in a different way.. how ever that was before Interest rates went up so not sure how it stacks up either way now.

your bank manager will be impressed you’ve had the foresight to look at a problem you will have in 6 months time. Most of them, as long as your financially fairly stable, will jump at giving you a secured loan against some land.
It’s worth running numbers on different loan amounts. When we had a loan 8 years ago now by borrowing an extra £1000 it took us up in to the next threshold which was a much lower Interest rate!
 
PI Stsker

PI Stsker

Member
Mixed Farmer
Location
South West
serf said:
Tinkering with OD can get them to call the OD in altogether ,
Know of a machinery dealer who asked for a bit more but could have managed without and they had another look and called it all in and finished him !
Click to expand...
I can’t see that’s quite true unless there was missed payments or something? Most banks love you lending, it’s how they make money!
 

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