Working scenario: Henderson Dairy Farm.
The situation
The Henderson family operates a 650-cow dairy farm in Southland. They recently invested in a new milking shed automation system and expanded their herd, creating irregular cash flow patterns during the upgrade period.
The challenge
In the 2024-25 season, they faced:
- $280,000 investment in automation equipment
- an additional $150,000 for herd expansion
- a provisional tax payment of $165,000 due March 2025
- expected lower income for the next few months, picking up in October
- bank facilities already used for farm improvements
- needing to maintain working capital for winter feed.
The solution
The Henderson’s worked with TMNZ to:
- finance the full $165,000 provisional tax payment
- secure 5.6% interest rate (vs IRD’s 10.88%)
- structure repayment to align with improved monthly income
- use TMNZ’s tax finance solution as an alternative funding source.
The results
The Henderson’s saved approximately $4,950 in interest compared to IRD and bank overdraft rates. They also:
- preserved their working capital for winter feed purchases
- maintained a good standing with existing bank
- protected their new automation investment
- avoided selling stock at suboptimal time
- better aligned provisional tax payments with their income cycle.
Your key takeaway
By creating a long-term plan to address variabilities in cashflow, you can plan ahead and secure lower interest on funds to cover costs.
For more on how our tax finance solutions can help your business, go here.