The working capital is the main and often the most demanding need for financing agribusiness. There can be various financing sources, for example, equity capital and trade loans in the form of deferred payments from suppliers to be made for plant protection products, seeds, fuel etc. However, it should be noted, that in general, both equity capital and trade loans could not fully cover the company needs and are often more expensive than bank financing.
Therefore, banks are becoming an important partner of farmers and can timely support them and provide the necessary funding, especially in case of the sowing campaign. Since some companies do not have enough assets to provide banking services, we offer a unique product in the market — financing the whole chain of product production from seeding up to the ultimate buyer with a provision in the form of future harvest and finished products. Working with our clients, we use the expert experience by one of the largest financial international groups BNP Paribas and our agronomists. Modern technologies, including satellite field monitoring and NDVI index analysis, allow both company management and the bank partner to receive up-to-date information about situation with crops and it allows operatively react and tackle the possible problems.
Bank agronomists have a successful experience of working with agricultural companies worldwide.
Another important aspect of financing needs is represented by investment projects of different companies. It could be split into two categories. Small and medium categories are represented by procurement of drones, equipment, the large ones — by infrastructure projects, such as the construction of elevators, the purchase of own fleet of cars or grain carts, as well as expansion of the land bank.
Vast majority of such projects are very capital intensive and have a long period of return on investment, at the same time they are necessary to ensure a high competitive position in the market and maintain a high margin of business. Not every company can handle such huge projects independently, and banks actively offer their participation with standard scheduled credit lines, as well as leasing products. We actively work in this segment and offer financing for the purchase of machinery and equipment in a convenient format for our customers.
This article was published in magazine destanations.com.ua (2019)