CASE STUDY: Emergency Funding for a Vegetable Farming Business
- Commercial Finance Advisor
- Apr 10, 2025
- 3 min read
Updated: Dec 31, 2025
A long-established vegetable farming business in South West Sydney supplies independent supermarkets almost year-round. The farm operates across two leased parcels totalling 19 hectares, with a fleet of five trucks and five tractors. Annual sales are around $2 million, generating EBITDA of $700,000.
The owner manages the business but does not work on the farm directly. Contractors handle day-to-day farming, while the business provides equipment, inputs, and transport.
The Business Challenge
The land being used for production sits alongside a creek with a rare government-issued water licence, allowing access to a low-cost and reliable water source. Without this licence, ongoing operations would not be commercially viable.
After decades of leasing, the landowner signalled retirement, creating the risk that future lease renewals may not be available.
At the same time, the business experienced two extreme storm events in a single year. The second event caused significant damage, washing away irrigation systems, in-ground equipment, and a large refrigeration unit.
The business urgently required funding to:
Rebuild essential infrastructure and resume full production, estimated to cost around $600,000.
Secure long-term access to the land by purchasing one of the two parcels, a 9.5 hectares lot for approximately $3 million.
The Funding Solution
A specialist lender assessed the business based on production history, cash flow stability, asset backing, and long-term viability rather than land ownership alone.
An initial short-term working capital facility of $600,000 was approved to fund urgent reinstatement works. This facility was supported by the business’s strong earnings, equipment fleet (including five trucks and five tractors), and consistent sales history, allowing production to restart without delay.
Separately, the lender structured a land acquisition facility to purchase one of the two leased parcels (approximately 9.5 hectares) at a value of $3 million. The loan was structured at a conservative 65% loan-to-value ratio, with funding supported by:
The acquired land
Supplementary security from existing residential property held by the owners
The business’s demonstrated ability to service the debt from ongoing operations
This approach allowed the business to stabilise first, then transition from short-term funding into a longer-term ownership structure.
Potential Benefits
With infrastructure restored and production fully operational, the business regained supply continuity and protected its supermarket relationships.
Securing ownership of the land removed long-term lease risk and ensured continued access to the critical water licence. The funding structure provided immediate relief during a crisis, while also laying the groundwork for future refinancing into a lower-cost, long-term facility once operations normalised.
Why This Works
A major bank was not suitable at the time due to the urgency, reliance on leased land, and need for short-term recovery funding. However, with operations restored and land ownership secured, the business is well positioned to refinance to a major bank over time, consolidating facilities and reducing borrowing costs.
This approach allowed the business to protect supply relationships, secure long-term operational certainty, and create a clear pathway to lower-cost funding once stability returned.
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DISCLAIMER: This case study is illustrative only and may be hypothetical or partially fictitious. Details may be modified to preserve confidentiality and should not be relied upon as a representation of any actual client outcome. Finance options are subject to individual lender credit criteria, approval, and applicable terms and conditions. This content is general information only and does not constitute financial, legal, tax, or accounting advice. Our firm provides business consulting and finance broking services only and recommends that readers seek independent professional advice tailored to their specific circumstances.
