Financial technology startup DelayPay, is enabling farmers to access straight forward credit for essential productivity purchases.
Backed by insurer QBE, DelayPay hopes to make asset financing as stress free as possible for agribusinesses by offering unsecured credit for $10,000 and above, with flexible six-month repayment plans.
Their point of difference from traditional asset financing is in the flexibility tailored to the agri-sector's unique liquidity patterns.
Farmers are able to pay back in instalments or a single lump sum, with discounts available for those who pay sooner.
This payback arrangement aims to take into account the seasonal and often volatile cash flow cycles of many agribusinesses, and the fact that on-farm investments generally take longer to materialise returns than other enterprises.
Co-founder Dwain Duxson says it marks a new category of financial services for the Ag sector.
"Farmers appreciate the product because of its flexibility and quick turnaround time for approval," said Duxson.
The unsecured nature means producers aren't required to put up their existing assets, such as their homes or equipment as security for the lender.
Together with co-founder and former NAB executive Kelsey Miller, the pair launched a pilot trial of their service to an overwhelming customer response.
"Since launching 7 months ago, we've doubled our books month on month. The demand for convenient agri- finance is strong," they said.
In the 2017 financial year, agricultural lending was worth $62.3 billion, financed primarily through bank loans.
In the wake of on-going drought, loans for hay and fodder topped the list in late 2017 which has only recently been surpassed by loans for soil improvement and fertiliser inputs.
No strangers to technology, Duxson backs that "farm customers are great to trial green field products with, because they relay back straight away how they want to use it".
While DelayPay is a new name in finance, the founder's flagship business Farm Tender is a well-established online marketplace.
The user-managed, buy-sell platform for all things farm related has been active since 2010 and boasts over 36,000 users.
Though both companies share a CEO in Duxson and DelayPay credit can be used for purchases on and off the Farm Tender site.
New South Wales startup, Secure Impact, is also striving to revolutionise farm finance through the creation of fractional or digital title agri-asset market.
Founder CEO Lisa McFadyen saw the need for alternative capital and investment pathways working as an agri-property valuer, where she became frustrated by the high asset value and poor liquidity problem.
Fractional ownership would allow property owners to unlock working capital by using the SecureX Exchange to trade fractional land parcels, and even the assets on the property - livestock, packing shed and energy farms - to investors.
McFadyen, who has also been named an Agrifutures Rural Woman of the Year 2019 finalist, is working with regulators to bring her alternative investment model to the market by 2020.
Investment in fintech companies is expected to continue strong on the back of last year's 'gold rush' with over $842 million spent in Australian deals alone.
