How Are Livestock, Plant and Crops Funded When You Buy a Farm?
Agribusiness Finance
Farm buyers · What funds each component · Australia
A walk-in walk-out farm can look like one purchase and still need several facilities to settle. This guide follows the buyer from price agreement to valuation, finance clause, PPSR searches and settlement, showing what funds the land, livestock, plant and standing crop, where the cash shortfall appears, and what has to be ready for the first season after takeover.
Quick Answer
A farm mortgage is written against land and fixtures, not the livestock, non-integral plant or standing crop. Those components need separate funding or security treatment, even when one lender coordinates the package, so split the contract price before calculating the buyer's real cash to complete.
Also called: walk in walk out farm finance, WIWO farm purchase finance, livestock and plant finance. These search terms overlap, but the funding still has to be separated by asset, security and settlement timing.
Where are you in the purchase?
| Stage | Question to solve | Do not move on until |
|---|---|---|
| Before the offer or contract | What exactly is included in the price, and which parts are land, livestock, plant, crop, water, inventory or goodwill? | The package is itemised well enough to estimate the land valuation, the separate facilities and the buyer's cash to complete. |
| While the finance clause is running | Does the finance condition protect the whole funding package or only the land loan? | The buyer's solicitor and finance adviser have read the same clause and the non-land facilities are being assessed on the same timetable. |
| Before unconditional approval | What does the valuation exclude, and what is already registered over the livestock, plant or crop? | The accepted security value, PPSR searches and any consent, payout or priority issue are understood rather than left for settlement week. |
| Before settlement | Can every facility, release and transfer happen on the same day? | The final apportionment matches the approvals, documents are signed, funding is available and the livestock identification records are dealt with where required. |
| Before settlement and the first season | Should the working-capital facility be approved before the farm settles? | The buyer has separated purchase finance from the cash needed for feed, seed, fertiliser, fuel, labour, contractors and the first trading cycle, and knows how that operating trough will be funded. |
Indicative transaction workflow only. Contract conditions, settlement steps and regulatory requirements differ by deal and jurisdiction.
What does the price cover when a farm sells with everything on it, and which parts will the loan not fund?
The price and the mortgage cover different things. A working farm commonly sells with the animals, the machinery and whatever is growing on it included in one figure, while the mortgage is secured on the land and the fixtures attached to it and stops there. Everything else inside that figure is personal property, and personal property is funded on its own terms, against itself, and recorded somewhere else entirely. The single number on the front page of the contract is therefore not one funding problem. It is four or five, and only one of them is a mortgage.
Is the livestock included in the price?
Often, yes. A farm sold with the animals, the machinery and the season's inputs already in the ground is described in the market as a walk in walk out sale, and the contract carries one figure for the lot. That is a commercial convenience, not a funding structure. The moment the buyer goes to fund it, the package has to come apart again, because the lender writing the mortgage is lending against dirt and improvements and nothing else. If you want the detail on what is and is not included and how to verify it before you sign, that belongs to the full farm purchase guide, and this page assumes you have done it. What matters here is what a walk in walk out sale means for the money.
Why does the mortgage stop at the fence?
Because the two systems were built not to overlap. The national personal property regime does not apply to the creation or transfer of an interest in land, does not apply to a right to payment connected with an interest in land where the writing identifies that land, does not apply to an interest in a fixture, and does not apply to a right, entitlement or authority granted in relation to the control, use or flow of water. Read the other way, that is a list of what the land mortgage owns and the register does not. Animals, tractors and an unharvested crop are on the other side of the line, so the mortgage cannot reach them and the register can. Personal Property Securities Act 2009 (Cth), s 8(1)(f), (i) and (j), compilation C22, 14 October 2024, read 19 September 2026. General information, not legal advice.
What does a buyer usually under budget?
The gap between the contract price and the mortgageable component. Buyers size a deposit against the headline figure, get an approval against the land, and only discover late that a meaningful slice of what they agreed to pay was never mortgageable in the first place. The plant is the part people see coming, because it looks like equipment and it funds like equipment on plant and equipment finance. The animals and the standing crop are the parts that surprise people, because they were sitting in the paddock when the buyer walked the property and they felt like part of the farm.
Does the settlement date change what you are actually buying?
Yes, and it changes what has to be funded. A contract completing with a crop still in the ground hands the buyer an asset that cannot be sold yet, a cost base already spent by somebody else, and possibly an interest already registered over that crop. The same property completing after harvest hands over stored produce or a bare paddock instead, which is a different funding question with a different answer. Livestock move the same way, because a herd counted at contract and a herd standing in the yards on completion day are only the same herd if the contract says how the difference is handled. Fix the date first, then work out what will actually be there when it arrives.
What happens when the deposit is sized against the wrong number?
The buyer completes short, because the deposit was sized against a price that was never all mortgageable. A buyer agrees one price for a grazing property with the herd, the plant and the season's inputs included, and budgets a deposit as a share of that figure. The land approval comes through cleanly and the valuation supports the land component. At completion the shortfall appears, because a material slice of the agreed price was livestock and machinery that the mortgage was never going to fund, and there is no facility standing behind it. What should have happened at the start is a component by component split of the price with a funding source named against each line, done before the deposit was calculated rather than after. What happens now is a scramble for a livestock facility and an asset finance line under time pressure, in the worst possible negotiating position, with a settlement date already fixed.
| What is in the price | What funds it | Which register it sits on | What the buyer has to arrange |
|---|---|---|---|
| The land and its fixtures | The mortgage, sized off the real property valuation. | The land title in your state or territory. | Nothing extra. This is the mortgage. |
| The livestock | A facility secured on the animals themselves, built around the trading cycle. | The national personal property register, agriculture collateral class. | A separate livestock facility, approved before the deposit is sized. |
| The plant, machinery and vehicles | Asset finance secured on each asset, or a broader facility over the plant. | The national personal property register, by serial number where one applies. | Asset finance per item or per tranche, approved in parallel with the mortgage. |
| The standing or growing crop | A security interest over the crop, which can attach while it is still growing. | The national personal property register. | A crop security, subject to whatever is already registered over that crop. |
| Harvested produce and stored grain | Working capital against the proceeds, or the same security following the crop into proceeds. | The national personal property register. | Working capital, or the same security following the crop into the proceeds. |
| Water entitlements | Treated separately again, and not on the personal property register. | The water register in the relevant jurisdiction. | Its own transfer on the water register, handled by your solicitor. |
| Leases, agistment and share farming agreements that bind you after completion | Nothing funds these. They change what the lender is lending against. | Some leases and bailments create registrable security interests of their own. | Nothing to fund. Disclose them, because they change what the lender is lending against. |
Scroll the table sideways to see every column.
Why does the valuation leave out the livestock, the plant and the crop?
Because a real property valuation is asked to value the land, and the professional standard says so. Livestock, non integral plant and standing crops sit outside a valuation of the real estate unless the property is valued on a going concern basis. That is not an oversight by the valuer, and it is not something a buyer can argue their way out of. It is the reason a loan sized off that valuation cannot stretch to cover the rest of the package, however sensible the total price looks.
What is the valuer actually asked to value?
The land and the improvements on it. The joint Australian and New Zealand guidance on rural and agribusiness valuation lists the things that may be valued alongside a rural property as biological assets, which may include crops, plantation or forestry timber and livestock, integral plant and equipment, non integral plant and equipment, and water rights or allocation, and then says that such items are typically excluded from the valuation for the real estate unless a property is valued on a going concern basis. The important word is excluded. What a rural valuer does and does not put in a report is set out in the parent guide on what a rural valuer includes, and this page does not repeat it. Australian Property Institute and Property Institute of New Zealand, ANZVGP 109 Valuation of Rural and Agribusiness Properties, effective 1 July 2022, section 6.2.1, read 19 September 2026. No review date is stated on the paper.
What does going concern change?
It changes the basis of valuation, not the basis of the mortgage. Where a transaction is valued on a going concern basis, the valuation takes in the business as well as the real estate, including fixed and non fixed plant, licences and goodwill. That can produce a number that looks much closer to the contract price. It does not follow that a land mortgage will be written against all of it.
A lender still has to be able to take security over each component in a form it can enforce, and a mortgage over the title does not give it security over a heifer. The guidance goes further than most buyers expect: on a going concern valuation the valuer is directed to itemise and apportion the value into separate categories, and to obtain separate expert advice on the biological assets and the non integral plant. The valuation profession already splits the package the way the funding has to be split. Australian Property Institute, Property Institute of New Zealand and New Zealand Institute of Valuers, ANZVGP 109 Valuation of Rural and Agribusiness Properties, published 1 March 2022, effective 1 July 2022, sections 4.2 and 5.0, read 19 September 2026.
| Category in the valuation | Inside the land mortgage | What funds it instead |
|---|---|---|
| Land | Yes. | The mortgage. |
| Improvements, including site and structural improvements and integral plant | Yes, where the plant is integral. Irrigation pivots and dairy plant are the examples the guidance gives. | The mortgage, which is why the integral and non integral line matters more than it looks. |
| Biological assets other than bearer plants, listed as crops, plantation or forestry timber and livestock | No. | A facility secured on the animals or the crop, registered on the national personal property register. |
| Non integral plant and equipment, given as tractors, other farm equipment, portable fencing and stockyards | No. | Asset finance secured on each item, by serial number where one applies. |
| Water rights and allocation | No, and not on the personal property register either. | Treated separately again, on the water register in the relevant jurisdiction. |
| Goodwill | No. | Not supported by the land mortgage. Any funding for goodwill depends on the wider business-acquisition structure, serviceability and lender policy, so do not assume the property loan will cover it. |
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Categories as set out in the guidance. The funding columns are ours, not the valuation profession's. Australian Property Institute, Property Institute of New Zealand and New Zealand Institute of Valuers, ANZVGP 109 Valuation of Rural and Agribusiness Properties, published 1 March 2022, effective 1 July 2022, section 5.0, read 19 September 2026.
How does a valuer use a walk in walk out sale as evidence?
By taking the other components back out of it. Where a reported sale price, for your property or for a comparable one, is known to include the animals, the plant or the crop, the guidance directs the valuer to make appropriate adjustments. That is the whole reason a walk in walk out headline figure and a land valuation can sit so far apart: one is the package, the other is the package with the personal property stripped out again.
One distinction is worth knowing before you assume the pattern holds everywhere. A bearer plant, meaning a living plant used to produce agricultural produce over more than one period, goes into the real estate value rather than beside it. So the vines and the fruit trees are usually inside what the mortgage can reach, while the fruit hanging on them is not. Australian Property Institute, Property Institute of New Zealand and New Zealand Institute of Valuers, ANZVGP 109 Valuation of Rural and Agribusiness Properties, published 1 March 2022, effective 1 July 2022, sections 2.0 and 6.2.1, read 19 September 2026.
The guidance also states expressly that it does not apply to rural lifestyle property, hobby farms or rural living property, which are a different conversation again.
What does this do to your deposit?
It moves the real question from how much cash you have to how much of the price the mortgage can actually reach. Two instruments say the same thing from opposite directions, which is the most useful thing on this page. The valuation standard says the animals, the non integral plant and the standing crop are outside the valuation of the real estate. The personal property statute says the register does not reach land, fixtures or water rights. Between them there is no overlap and no gap: everything in the contract falls on one side or the other, and the buyer needs a funding source named on both sides before the deposit is committed.
What the land valuation carries
- The land itself and the improvements on it
- Fixtures attached to the land
- Integral plant, where it is treated as part of the improvements
- The basis your mortgage is sized against
What sits outside it and needs its own funding
- Livestock, breeding and trading alike
- Non integral plant, from tractors to portable yards
- The standing or growing crop
- Water rights and allocation, handled separately again
What number is your deposit actually a percentage of?
The land component, not the contract price. A deposit calculated as a share of the headline figure is being measured against a number the mortgage was never going to reach, so the figure that matters is cash to complete: the whole price, less what the land mortgage will advance, less what each separate facility over the livestock, the plant and the crop will advance, plus duty and costs. Every one of those advances is set by a different lender on a different policy, which is why the number cannot be worked out from the contract alone. It can be worked out early, and doing it early is the single highest value hour in a farm purchase. Check where you stand before the deposit is committed rather than after.
How are the livestock, machinery and crops in a farm purchase actually financed?
The non-land components need their own funding and security treatment, but they do not always need separate lenders. Machinery is commonly funded on asset finance, livestock may sit on a specialist or broader agribusiness facility, and a standing crop can carry its own registered security interest. The practical job is to name the funding source, security and repayment path for every component before assuming one land approval has solved the whole purchase.
Can one lender fund the land, livestock and machinery?
Yes, sometimes one banking relationship can coordinate more than one part of the package, but that does not turn the whole purchase into one mortgage. The land, livestock, machinery and working capital can still sit on different facilities, security documents and approval tests. Treat a one-lender solution as a coordination advantage, not as proof that every component has become land security. Practitioner framing from Switchboard Finance. Product structure and security vary by lender and deal.
Does livestock finance need a mortgage over the farm?
Not always. Crops and livestock are personal property under the national regime and may be used as collateral, so some specialist livestock facilities rely primarily on a PPSR security interest over the animals rather than a mortgage over the land. Other providers reserve the right to require additional guarantees or security, and a bank can assess livestock funding inside a broader agribusiness relationship. The security structure is therefore a lender and deal question, not a rule that livestock finance always sits outside the land lender.
ppsr.gov.au, Farming and agriculture, read 20 September 2026; Legacy Livestock Finance FAQs and NewFarm AgriFinance FAQs, both read 20 September 2026, illustrate different Australian specialist security settings. Product terms change and lender policy applies. General information only.
Is breeding livestock treated like livestock bought to be turned off?
No, and the difference drives the facility. Breeding animals are held for years and produce a return while they are held, so they behave like a productive asset and can support a facility with a longer horizon. Animals bought to be grown and sold behave like working capital: they are an input that converts to cash on a known cycle, and the facility that funds them is expected to be repaid out of that conversion. A buyer who describes the whole herd in one breath, without separating what is being retained from what is being turned off, gives the lender no way to size either. The wider picture across an operation is in the full agribusiness finance guide.
Why does a livestock facility revolve?
Because the collateral turns over. Animals are bought, grown, sold and replaced, and the facility is expected to rise and fall with that rather than step down on a schedule set at drawdown. Lenders therefore tend to review a facility of this kind against the cycle and the season rather than at an arbitrary anniversary, and they care about what happens to the money when the animals are sold, because the proceeds of the collateral are what the security follows. That is much closer in shape to seasonal working capital on a farm than it is to a mortgage. This guide does not publish advance rates, loan to value ratios or facility sizes for livestock, for a reason set out in the practitioner note below: the figures are genuinely unpublished in Australia, and inventing one would help nobody.
What funds the plant?
Asset finance, usually one facility per asset or per tranche, secured on the machinery itself. That is the most conventional part of the whole package and the easiest to arrange in advance, which is precisely why it should be arranged in advance rather than left until the land approval is done. Asset finance for farm plant is also where the boundary between integral and non integral equipment starts to matter commercially. Irrigation infrastructure bolted into the ground may be treated as part of the land and picked up by the valuation. A header sitting in the shed will not be.
Can government-backed finance fill part of the livestock or plant gap?
Sometimes, but treat it as a possible component of the package rather than the first funding plan. The Regional Investment Corporation's AgriStarter Loan can support a first farm business and other assets, but at least half of total debt must initially sit with a commercial lender and the applicant needs that lender's support. In Queensland, QRIDA's First Start Loan can include buying or expanding a first herd as well as buying a first farm. Other jurisdictions run different programmes, or no equivalent programme at a given time.
The practical order is therefore commercial position first, programme eligibility second. ric.gov.au, AgriStarter Loan, and qrida.qld.gov.au, First Start Loan, read 19 September 2026. Eligibility and programmes change. Queensland example only for QRIDA. No amount or rate is stated here. The wider concessional routes are covered in the agribusiness finance guide.
| What you are buying | How the lender sees it | What the facility looks like | What clears it |
|---|---|---|---|
| Breeding animals held for years | A productive asset that earns while it is held. | Longer horizon, reviewed against the herd and the operation. | Progeny sold over successive cycles, and the operation's overall cash flow. |
| Animals bought to be grown and sold | Working capital in animal form, on a known cycle. | Revolving, expected to move with the cycle rather than amortise. | The sale itself, with the security following the proceeds. |
| Plant and machinery | A depreciating asset with a resale market and often a serial number. | Asset finance secured on the asset, on its own term. | Scheduled repayments out of trading income. |
| A standing crop you inherit at completion | Personal property that can carry a security interest while it is still growing. | Short, tied to the harvest, and sensitive to who already holds an interest. | Harvest and sale, assuming you owned the crop in the first place. |
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What existing security interests can affect the livestock, machinery and crops you are buying?
Anything already registered over the vendor, the livestock, the machinery or the crop can change what the buyer receives and what the new lender can rely on. A PPSR search is therefore not just a legal due-diligence step. It is a funding step: an existing bank registration, supplier interest, lease, bailment or crop security can require investigation, release, amendment, consent or different priority treatment before the new facilities are sized and settlement is allowed to proceed.
Can two lenders hold security over the same paddock?
Yes, and on a working farm it is normal. One holds a mortgage over the land. Another holds a registered interest over the animals, the machinery or the crop, recorded on the personal property register rather than on the title. Neither is hiding anything from the other, because both systems are searchable. Whether a particular buyer needs to run those searches, and what to do with the results, is due diligence, and it belongs to the parent guide on due diligence before you sign. The funding question is what the answer does to your own facility.
What happens if a PPSR search finds an existing security interest?
It does not automatically kill the purchase, but it has to be resolved before you assume the asset is clear or available to support your new facility. The register tells you that a secured party has a registered interest and identifies that party; it does not tell you the amount still owing. The next step is to work out what property the registration actually covers and what has to happen at or before settlement, which may include a payout, release, amendment, consent or an agreed priority position.
For the buyer, the practical rule is simple: do not treat a registration as "explained" until the solicitor and finance team know how it will be dealt with and the incoming lender has accepted that treatment. The PPSR warns that buying property subject to a registered security can expose a buyer to repossession risk, and its own case study on second-hand machinery shows a buyer refusing to proceed until the bank registration is gone. ppsr.gov.au, Agribusiness, and Buying second-hand machinery or equipment, read 20 September 2026. General information, not legal advice.
What does a prior land mortgage do to a crop security?
It survives it, unless the mortgagee agreed otherwise in writing. The statute provides that a security interest in crops does not prejudicially affect the rights of a lessor or mortgagee of the land on which the crops are growing where those rights existed at the time the crop security was created and that lessor or mortgagee has not consented in writing to its creation. Subject to that, the section then runs the other way: a perfected security interest in crops is not prejudicially affected by a subsequent sale, lease or mortgage of, or other encumbrance on, the land. Personal Property Securities Act 2009 (Cth), s 84, compilation C22, 14 October 2024, read 19 September 2026. General information, not legal advice.
Why does your own lender search the register too?
Because on a purchase the new land mortgage is the later interest, and the second limb of that section is the one that bites. A crop security that was already perfected before your mortgage was registered is not prejudicially affected by your mortgage, which means the crop already growing on the country you are buying can sit in front of a facility you have not drawn yet. That is the consequence almost nobody draws out loud. The buyer is told to search the register to protect themselves from buying encumbered goods. The lender searches for a different reason: to find out what is standing in front of it.
What happens when the crop was already financed by the supplier?
The crop in the ground at completion was grown on supplier terms. Seed, fertiliser and chemical were provided on retention of title terms, and the supplier registered its interest before the crop was planted. The buyer's lender searches, finds it, and now has to price the possibility that the first call on the harvest is not the buyer's and not the lender's. The deal does not necessarily fail. What changes is the order of priority, the size of what the buyer's lender will actually advance against that crop, and whether the supplier is asked to release or subordinate before completion. The time to find this is while the contract can still be adjusted, not in the week of harvest.
What about machinery and stock the vendor does not own outright?
Some of it is on the register as somebody else's, and the lease itself can be the security. A lease or bailment is a PPS lease, and so registrable, where the lessor or bailor is regularly in the business of leasing or bailing and the statutory duration tests are met. For bailments the bailee also has to give value.
The register's own agricultural illustration of a bailment is a farmer leaving grain at a storage facility before retrieving it for sale, which is exactly the sort of arrangement a buyer can inherit without noticing. Many qualifying arrangements can also create purchase money security interests with special priority consequences. Different rules apply where the lease or bailment began before 20 May 2017. ppsr.gov.au, Leases, bailments and consignments that can be registered on the PPSR, read 19 September 2026. The register's own guidance recommends legal advice on whether a particular arrangement creates a registrable security interest. General information, not legal advice.
The consequence on a purchase is narrow and sharp. The contract inventory lists the plant and the animals. It does not tell you who owns them or what is registered against them, and leased or bailed goods look identical to owned goods when you are standing in the shed. That is what the search is for, and it is why the search happens before the facility is sized rather than after.
What can the feed and fertiliser supplier claim?
A special agricultural priority, and it is precise. Where a perfected security interest in crops is granted for value and granted to enable the crops to be produced, it takes priority over other security interests granted by the same grantor in the same crops or proceeds, provided either the agreement was made while the crops were growing or the crops are planted during the period of six months after the day the agreement was made. Livestock have their own version: the same priority applies where value is given to enable the animals to be fed or developed, provided the animals were held when the agreement was made or acquired within six months after it. Personal Property Securities Act 2009 (Cth), ss 85 and 86, compilation C22, 14 October 2024, read 19 September 2026. Section 86 does not outrank a purchase money security interest. General information, not legal advice.
The mechanics behind the priority question
- ClassAgriculture is the register's own collateral class, and it covers crops and livestock. A lender that wants everything registers instead over all present and after-acquired property, which captures what the farmer owns now and what is bought later. ppsr.gov.au, Glossary and Registrations by collateral class, read 19 September 2026.
- s 84A crop security does not prejudicially affect a lessor or mortgagee of the land whose rights existed when it was created and who did not consent in writing. Subject to that, a perfected crop security is not prejudicially affected by a later sale, lease or mortgage of the land. legislation.gov.au, PPSA 2009 (Cth) s 84, compilation C22, read 19 September 2026.
- 6 mthsThe special agricultural priority for a supplier who gives value to produce a crop or to feed and develop livestock, conditional on the crop being planted, or the animals acquired, within six months after the agreement. legislation.gov.au, PPSA 2009 (Cth) ss 85 and 86, compilation C22, read 19 September 2026.
- s 8What the register does not reach at all: the creation or transfer of an interest in land, a right to payment connected with identified land, an interest in a fixture, and rights in relation to the control, use or flow of water. legislation.gov.au, PPSA 2009 (Cth) s 8(1)(f), (i) and (j), compilation C22, read 19 September 2026.
Mechanics only, with no figures and no advance rates. Statutory references are to the compilation in force on the day this guide was reviewed. General information, not legal advice. Check the register at ppsr.gov.au and take your own legal advice on any specific security.
How does the price get split between the land and everything else, and what has to fund on the same day?
The split is negotiated between buyer and seller and written into the contract, usually for tax reasons, and the way it is written decides how much of the purchase your land mortgage can actually cover. That is the funding consequence, and it is the only part of the apportionment question this guide takes. How the split should be struck for duty and tax is a matter for your solicitor and your accountant, and the tax side is covered in the parent purchase guide rather than here.
Who decides how the price is split?
The parties do, in the contract, usually advised by accountants on both sides with an eye to duty, capital gains and the goods and services tax treatment. The concessions attached to a farm sale are conditional, which is what pulls the negotiation around.
A sale of farmland is free of goods and services tax where the land was used for a farming business for at least five years immediately before the sale and the buyer intends to use it for a farming business. A going concern sale is free of the tax where the sale is for payment, the purchaser is registered or required to be registered, and the parties have agreed in writing that the sale is of a going concern. Those conditions shape how the contract is structured, and the structure then shapes the funding. ato.gov.au, Special GST rules for primary producers, last updated 13 July 2023, and Selling a going concern, last updated 15 December 2022. Both read 19 September 2026. General information, not tax advice. Take your own advice from a registered tax agent.
What does the split do to your loan?
Every dollar moved out of the land component is a dollar the mortgage cannot fund and a dollar some other facility has to. That is the whole mechanism, and it is not complicated once it is said out loud. The problem is when it is said.
An apportionment negotiated late, purely for a tax outcome, can move a large slice of the price out of the mortgageable column after the buyer's approval has already been issued against the old assumption. The tax result improves, the funding breaks, and the shortfall is discovered close to completion when the options are worst. The lender is not being difficult. It is lending against a number that changed.
Does the finance clause protect you if only the land is approved?
Not necessarily, and this is the gap that catches farm buyers. A finance clause in a contract of sale can be drafted around obtaining approval for a loan, while the livestock facility, plant finance and any crop facility may sit on separate approval paths. A buyer can therefore have the land loan approved while a material slice of the purchase still has no facility behind it. Whether that approval satisfies the clause depends on the actual contract wording, so have your solicitor read the clause with the whole funding package in view before it is signed.
There is a documentary trace of the gap. The Law Society of New South Wales publishes a factsheet on possible additional clauses in contracts for the sale of rural land, prompting solicitors on apportionment, early access, enclosure permits, livestock on the property, onsite sewerage, roads and access, and water rights. On apportionment it suggests splitting the price between farming lands and improvements, house and curtilage, and water licence.
The factsheet does not itself extend a finance condition to livestock or plant finance. Its livestock clause addresses the amount of stock on the property between exchange and completion instead. lawsociety.com.au, LS3148 Factsheet: Possible Additional Clauses in Contracts for the Sale of Rural Land, read 19 September 2026. New South Wales. The factsheet states it is general information and not a substitute for legal advice, and clause drafting is a matter for your own solicitor.
Read that as a picture of ordinary practice rather than a rule about your contract. The profession's own rural prompt list treats the stock and the plant as things to describe and apportion, not as things the finance condition has to reach. Whether your clause reaches them is a question for whoever is arranging the money and whoever is drafting the contract, together, before it is signed.
What if the livestock, crop or machinery changes before settlement?
The funding has to follow what will actually be transferred at completion, not what happened to be on the farm when the contract was first negotiated. Livestock can be sold, born, die or change class; a standing crop can be harvested or deteriorate; stored produce can be used; and machinery can be removed, replaced or turn out not to be owned outright. If the contract changes the quantity, ownership or value of a funded component, the broker and lender need the revised position while there is still time to resize the facility.
The contract should deal with how changes are counted, valued or adjusted, but the legal mechanism is for the buyer's solicitor. The finance point is narrower: the final inventory and apportionment must match what the facilities were approved to fund. Do not let the finance team work from the exchange-day list while the settlement statement is working from a different farm. Practitioner framing. The Law Society of New South Wales rural-land clauses factsheet separately identifies livestock on the property and apportionment as contract issues. General information, not legal advice.
What does a late apportionment look like when it breaks the funding?
It looks like an approval that no longer matches the contract it was issued against. The contract is signed with a working split, and the land approval is issued against it. Weeks later the accountants revisit the apportionment and move value out of the land component and into the plant and livestock components, for a better tax outcome. Nobody tells the lender, because nobody thinks of the split as a funding document. The mortgage is then sized against a smaller land component than the one it was approved on, the plant and livestock facilities were never arranged because they were not needed at the original split, and the gap surfaces when the funds are being called. It is discoverable the moment the revised contract is read by someone who is thinking about the money, which is why the revised split should go to the broker and the lender the same day it goes to the accountant.
Who owns the crop before it is harvested?
Whoever the contract says, and if the contract is silent the answer turns on who paid for it. The Australian Taxation Office's public ruling position is that, provided no agreement to the contrary exists between the business operator and the land owner, it accepts that a business operator owns annual crops growing on another entity's land when that operator pays all the expenses for the crops. For funding this matters in one blunt way: a crop the buyer does not own cannot be offered by the buyer as security. If the vendor grew it and the contract does not deal with it, the buyer inherits a paddock full of somebody else's asset. ato.gov.au legal database, GST Industry Issues, Primary Production Industry Partnership, Farm ownership and crops, issue 2.9.2, a public ruling for the purposes of the Taxation Administration Act 1953, read 19 September 2026. General information, not tax or legal advice.
What happens to the property identification code and the livestock records?
They have to move too, and nothing moves them automatically. A property identification code is allocated by the state or territory department and identifies the property on which livestock are kept. Agriculture Victoria's instruction is to amend the code when the property changes ownership, or when you buy, sell or lease land, and only the registered holder can make that change.
Victoria says there is no fee and asks for seven business days. agriculture.vic.gov.au, Property Identification Codes (PIC), page last updated 20 July 2026, and integritysystems.com.au, Updating your PIC, both read 19 September 2026. Victorian requirements. Other states and territories run their own schemes, so check the department in your own jurisdiction.
This reaches the funding for one reason. A facility secured on animals depends on those animals being identifiable and locatable, and both of those run off the code. A buyer who settles with the code unresolved owns livestock that cannot be moved or sold cleanly, which is the same thing as security the lender cannot realise. It belongs on the settlement list, not the list of things to sort out afterwards.
What has to be ready on the same day?
All of it. Two or three facilities funding one completion have to be unconditional together, because a farm does not settle in parts. The mortgage, the livestock facility and the asset finance behind the plant each have their own approval path, their own conditions precedent and their own documentation, and the slowest one sets the date. Funding the plant separately is the piece most often left until last, because it feels routine. The season's inputs are the other piece, since a buyer taking over mid season inherits a cost base as well as an asset, and funding the season ahead is a separate conversation again. The overall shape of a farm purchase funding package is in the agribusiness finance guide.
- The apportionment in the contract, settled and final, because everything downstream is sized off it.
- The land valuation and the mortgage approval, issued against that apportionment rather than an earlier one.
- The PPSR searches completed, every relevant registration identified, the underlying arrangement understood, and any payout, release, amendment, consent or priority treatment agreed with the incoming lender.
- The livestock facility, unconditional, with its security registered at or before completion.
- The asset finance over the plant, unconditional, on the same date.
- The season's inputs and working capital, where the buyer is taking over mid season.
- The property identification code and the livestock database records, moved across rather than left with the vendor.
What does a lender want to see before funding livestock on a farm you have not run yet?
A lender is assessing two things: whether the country can carry the animals, and whether the operation can convert them to cash. On a purchase it is asking that about land the buyer has never farmed, using numbers the buyer did not generate. That is the whole difficulty, and it is the reason a livestock facility on a purchase is a harder conversation than the same facility for an established operator down the road.
How does a lender read country you have not farmed?
Through its agricultural carrying capacity, and through whatever evidence exists that the figure is real. Carrying capacity is the number of animals the country can run and sustain across a normal season. Graziers and lenders often express it in dry sheep equivalents, or DSE, so different classes of animal can be compared on the same country. The rural valuation guidance defines both units precisely: a dry sheep equivalent is the feed a two year old 45 kilogram Merino sheep needs to hold its weight, and the cattle equivalent, the adult equivalent, is a 450 kilogram non lactating beast. Australian Property Institute, Property Institute of New Zealand and New Zealand Institute of Valuers, ANZVGP 109 Valuation of Rural and Agribusiness Properties, published 1 March 2022, effective 1 July 2022, section 3.0, read 19 September 2026.
The same guidance treats past carrying capacity and production history as valuation considerations, and where trading performance is used it looks for roughly three to five years of it. Australian Property Institute, Property Institute of New Zealand and New Zealand Institute of Valuers, ANZVGP 109 Valuation of Rural and Agribusiness Properties, published 1 March 2022, effective 1 July 2022, sections 3.0, 4.19 and 4.20, read 19 September 2026.
The figure itself is only as good as its source. A capacity assessed independently, on stocking history and rainfall records for that property, carries weight. A capacity asserted in a sale listing does not.
Whose numbers are you using?
This is the question that decides the deal, because most published assessment guides assume an operation that already exists. The standard list is financial statements, tax returns, a livestock schedule, crop records and a cash flow forecast. A buyer has none of them for this country. There is no trading history on a property they have not owned and no schedule for a herd they have not bought.
The way through is to replace the vendor's numbers with independent ones and to show the operator behind them: an independent assessment of the country, the buyer's own history on comparable country elsewhere, and a forecast built from the buyer's own costs rather than the vendor's. How a seasonal farm facility is assessed is the closest analogue, and the same logic runs through expanding onto more country.
What gets a livestock facility declined?
Rarely the animals. It is usually the join between the buyer and the country: an agricultural carrying capacity taken on trust from the vendor, a plan for the animals with no timing attached to it, a forecast that assumes the seller's cost base, a herd described as one lot without separating what is being retained from what is being turned off, or a security position that turns out to sit behind somebody else's registered interest. The pattern behind all of those is the same. The lender is asked to take the buyer's optimism as the evidence. Bring the evidence instead, and the conversation changes. If you want to test where you stand before you commit to a contract, check your eligibility first.
What should you have ready before the first funding conversation?
Six things, and having them assembled is usually the difference between a week and a month. None of them require a lender to be chosen first.
- The contract, including the apportionment between land, livestock, plant and anything else, and the settlement date.
- A register search over the vendor and over the assets being bought, so anything already sitting in front of you is known rather than discovered.
- A livestock inventory separated into what is being retained and what is being turned off, with the timing of each.
- A plant and machinery list with serial numbers where they exist, because that is how the register identifies them.
- An independent view of what the country will carry, rather than the figure that came with the listing.
- A forecast built on your own cost base and your own operating plan, not the vendor's trading history.
Assembled, that package answers most of what a livestock lender asks before it is asked. Missing, each item becomes a round trip, and the round trips are what consume a finance clause.
From our broking, indicative
Across the rural purchases we see, a livestock facility on a farm the buyer has never run is assessed in a fairly consistent order, and the order is worth knowing because it tells you what to prepare first rather than what to prepare most.
- Who the operator is and what they have run before, on what kind of country, and whether that history is documented anywhere a lender can read it
- What the country itself will carry, assessed independently rather than taken from the listing or the vendor
- What is actually being bought, separated into animals being retained and animals being turned off, with the timing of each
- Where the money comes back from, and on what cycle, expressed as a forecast built from the buyer's own cost base
- What is already registered against the animals, the plant and the crop, and where the new facility would rank against it
The item most often missing when the contract is already signed is the second one. Buyers arrive with finance in mind and an agricultural carrying capacity figure they were handed, and no independent view of it, which means the single number the whole facility depends on is the one nobody has tested. The second most common gap is the last one, where a registered interest over the crop or the plant surfaces late and changes what the new facility can sit in front of.
Indicative only, based on rural purchase deals Switchboard Finance has placed, as at September 2026. Not a quote, not an offer, and not an indication that any application will be approved. Every lender assesses differently and outcomes depend on lender policy and your own circumstances at the time of application. Not financial advice.
What finance do you need before and immediately after farm settlement?
The purchase is not fully funded just because the land, livestock and machinery can settle. If the new operation has to spend cash before its first sale receipts arrive, the buyer also needs a working-capital plan for the first production cycle, and that plan should be sized while the acquisition facilities are still being arranged.
Should your farm working-capital facility be approved before settlement?
Ideally, yes. If the farm needs seasonal cash before the first crop, livestock or processor receipts clear, size and arrange that working capital before settlement rather than using the last available cash to complete the purchase and trying to solve the operating shortfall afterwards. Feed, seed, fertiliser, chemicals, fuel, wages, contractors, repairs, insurance and replacement livestock can all start consuming cash while the first income is still weeks or months away.
Build the first twelve months from cash-clear dates, not just production dates. The first interest payment, asset-finance repayment, input order and sale receipt can all land on different clocks. If the trough belongs to the season rather than the acquisition, put it into the seasonal farm finance plan instead of stretching the purchase facilities to do a job they were not written to do.
What if the farm is affordable to buy but not to run?
Then the funding package is incomplete. A farm can satisfy the land lender's purchase test and still be undercapitalised on day one if the deposit, duty, livestock and machinery consume the cash that was supposed to fund the operating cycle. Treat the acquisition and the first season as two connected cash-flow problems: settlement tells you whether you can buy the farm, while the working-capital forecast tells you whether the farm can operate until its own receipts take over.
What happens next?
The short version. One contract price can require several funding lines and they all have to meet on one settlement date. The land mortgage is sized against accepted real-property security, while livestock, non-integral plant and a standing crop need separate funding or security treatment. The price split changes cash to complete, existing PPSR registrations can change what the buyer and incoming lender can rely on, and the first-season operating trough should be funded before completion rather than after it.
Key takeaway: before you commit the deposit, split the purchase into components, name the funding source for each one, clear or deal with existing security interests, and make sure the first season is funded as well as the settlement.Frequently asked questions
Not by itself. The mortgage security is the land and fixtures; livestock, non-integral machinery and a standing crop are personal property and need separate funding or security treatment even where the same banking relationship coordinates the overall purchase. The Personal Property Securities Act excludes interests in land and fixtures from the personal-property regime, which is why the security systems sit apart.
Yes. The register's own guidance is that crops and livestock are personal property under the Personal Property Securities Act and may be used as collateral, and that the reform may make it easier to borrow against crops, livestock, farm machinery, agricultural products and other assets other than land. What it does not do is set what a lender will advance. That is a policy question for each financier, assessed on the class of animals, the country they run on and the operation behind them.
Not always. Some specialist livestock facilities rely primarily on PPSR security over the animals being financed, while other providers reserve the right to require additional guarantees or security. Crops and livestock are personal property and may be used as collateral, but the exact security package is a lender and deal question, so do not assume livestock finance will automatically sit outside the land lender's security.
Yes, and the Act says so directly: a security interest may attach to crops while they are growing. The interaction with the land is set by section 84. A crop security does not prejudicially affect the rights of a lessor or mortgagee of the land where those rights existed when the crop security was created and that lessor or mortgagee has not consented in writing. In the other direction, a perfected crop security is not prejudicially affected by a later sale, lease or mortgage of the land.
It has to be investigated before you assume the asset is clear or available as security for the new lender. The PPSR tells you that a secured party has a registered interest and identifies that party, but it does not tell you the amount still owing. Depending on what the registration covers, settlement may require a payout, release, amendment, consent or an agreed priority treatment accepted by the incoming lender.
Whoever the contract says, and if the contract is silent the question is decided by conduct. The Australian Taxation Office's public ruling position is that, provided no agreement to the contrary exists, a business operator owns annual crops growing on another entity's land when that operator pays all the expenses for the crops. For funding this is not academic. A buyer who does not own the crop at completion cannot offer it as security, so a facility built on the assumption that they do will not settle.
The finance should be updated to match what will actually transfer at completion. Livestock can be sold, born, die or change class, crops can be harvested or deteriorate, and machinery can be removed or replaced. The contract should deal with the legal adjustment, while the finance team needs the final inventory and value early enough to resize any affected facility.
It is negotiated between the parties and written into the contract, usually for tax reasons. The funding consequence is the part nobody raises at the time. Every dollar moved out of the land component is a dollar the mortgage cannot fund and a dollar some other facility has to, so an apportionment that improves the tax outcome can leave the buyer short on the day the money moves. Settle the split and the funding together, not one after the other.
Ideally, yes. If feed, seed, fertiliser, chemicals, fuel, wages, contractors, repairs, insurance or replacement livestock have to be paid before the first crop, livestock or processor receipts clear, size that operating trough before settlement. A farm can be affordable to buy and still be undercapitalised on day one if the deposit and purchase facilities consume the cash needed for the first season.
Financial statements, tax returns, a livestock schedule, crop records and a cash flow forecast, plus a plan for the animals and the timing of their sale. On a purchase there is a problem with that list: the buyer has no trading history on this country, no schedule for a herd they have not bought, and an agricultural carrying capacity figure that came from the vendor. The work is in replacing the vendor's numbers with something independent before the contract is signed, not after.
Usually only the loan the clause describes, which in practice is the land mortgage. A finance clause drafted around obtaining approval for a loan can be satisfied by a land approval on its own, while the livestock facility and the asset finance over the plant sit outside it. That means a buyer can go unconditional with a material part of the price still unfunded. The fix is to have the clause read by whoever is arranging the money before it is signed. Contract wording differs in every state and in every deal, so take your own advice from your solicitor on the clause in front of you.
A farm mortgage is sized against the real-property security value the lender accepts and that lender's policy, not automatically against the whole walk-in walk-out contract price. Livestock, non-integral plant, crop and other excluded components can therefore create a separate funding requirement. The useful number is cash to complete: the purchase price and costs, less the land advance and less the amount each separate facility will actually provide. Work it out before the deposit is committed.
Not on an ordinary land valuation. The joint Australian and New Zealand rural valuation guidance lists crops, plantation or forestry timber, livestock, integral and non integral plant and equipment and water rights as items that may be valued but are not included in the valuation of the real estate components, and says such items are typically excluded unless the property is valued on a going concern basis. On a going concern basis the valuer is directed instead to itemise and apportion the value into land, improvements, biological assets, non integral plant, water rights and goodwill, and may need separate expert advice on the animals and the plant. Bearer plants, meaning vines and fruit trees, sit inside the real estate value rather than beside it.
Not by itself. The code is allocated by the state or territory department and is required for every property on which livestock are kept. Agriculture Victoria's instruction is to amend the code when the property on which the livestock are kept changes ownership, or when you buy, sell or lease land, and only the registered holder of the code can make that change. It is free and Victoria asks for seven business days. This reaches the funding because a facility secured on animals depends on those animals being identifiable and locatable, and both of those run off the code. Other states and territories run their own schemes, so check the department in your own jurisdiction.
Often not, and that is the sharpest reason the old vocabulary still matters. In New South Wales, Victoria and South Australia the protected farm mortgage definition includes an interest or power arising from a hire purchase agreement relating to farm machinery, and expressly excludes a stock mortgage, a crop or wool lien, and the interest of the lessor of leased farm machinery. Victoria and South Australia go further and also exclude a security interest, within the meaning of the Commonwealth personal property statute, in stock, crops or wool. So in two of those three states the modern registered security over the animals or the crop sits outside the mediation protection as well, not only the repealed instruments. The protection attaches to the land mortgage, not to the facilities funding everything else, which is what farm debt mediation turns on. Farm Debt Mediation Act 1994 (NSW) s 4; Farm Debt Mediation Act 2011 (Vic) s 3, authorised version 004 incorporating amendments as at 31 October 2022; Farm Debt Mediation Act 2018 (SA) s 4, current version 1 July 2025. All read 19 September 2026. These three states only. Other jurisdictions run their own schemes. General information, not legal advice.
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