Patience and persistence resolves family’s financial hardship

A farming family in the Mid-North of South Australia sought help from RBS when the considerable pressure applied by their bank manager became more than they could sustain.

The business was under considerable financial stress. The family of seven relied on the farm for day-to-day living expenses, their finance was at the maximum amount possible, and payments were still owing to payout the client’s parents as part of the succession agreement made in 2013.

Three years of drought exacerbated their financial situation, and they struggled to keep their heads above water. The family were seeking some financial support to relieve the pressure and asked for help to apply for “FHA, Rural Aid, whatever is available to help us out”.

Engaging with the clients was extremely difficult. While the Business Financial Counsellor obtained some information on the farm’s financials from their accountant, the clients wouldn’t commit the time to prepare the particulars to assist them with financial support, let alone holistically consider their dire financial position.

When the clients attended their appointments, they were disengaged, easily distracted by mobile phones, and left mid-conversation for breaks.

An explanation for their behaviour became apparent as additional information came to light. The clients were very embarrassed about how bad their financial situation had become and knew that they should have done something sooner rather than carrying on as if nothing was wrong.

After considerable discussions with their bookkeeper and accountant, it was clear that the business was likely insolvent. Several outstanding invoices were found in unopened mail; the bookkeeper had ceased providing services due to unpaid bills, and the accountant was also unwilling to spend more time doing unpaid work for the client.

Through the persistence of the Business Financial Counsellor, the option of selling their business was eventually discussed. While the consequences of maintaining the status quo were hard to discuss, the decision to sell before the bank foreclosed was more appealing than the alternative.

Once the clients had resolved the decision for themselves, it became easier to progress on listing the business for sale and focus on their future.

While the family has moved away from the community where their family had farmed for several generations, they have been able to find employment in a new location.