Oxbury’s Flexi-Credit - Milk Cheque

  • by Kareema Ali
  • Features

 Oxbury’s Flexi-Credit - Milk Cheque is only available to eligible British dairy farmers, providing an additional line of working capital credit.

Operating in a similar way to an overdraft and on more competitive terms, it allows farmers to draw down from their approved credit limit and transfer money instantly into their main bank account to pay back when it suits their cashflow, with a minimum repayment of 5% per month plus interest.  Oxbury Flexi Credit – Milk cheque was developed for these periods, providing dairy farmers with additional cash which can then be repaid or drawn down as and when needed.

“Cashflow can be extremely challenging at different times of year,” explains dairy farmer and consultant Grant Hartman. “We have a year-round calving, housed herd, and in the spring, we have to pay for rent, fertiliser, fuel, seeds and sprays on top of our ongoing feed costs. We can’t balance that with increased milk sales as we’re on a level supply contract with deductions in the spring months for additional volume, so cashflow in the spring is particularly difficult.

Mr Hartman milks 650 pedigree Holstein cows at Trebersed Farm, Carmarthen, and in his dairy consultant capacity he helped Oxbury to tailor the Oxbury Flexi Credit - Milk Cheque offering. “It has to be easy to apply and competitively priced, and the level of credit must be balanced with the business,” he says. “For me, it’s an ideal bridge through challenging periods.”

Dairy farmers can simply transfer the money into their current account, which can be any bank and then simply repay when they want. “So, I could draw down funds for example £30,000 to cover fertiliser payments while waiting for my milk cheque, and then repay it when my cash comes in, there is no need for me to change banks either,” says Mr Hartman.

Block calving herds may need to borrow at different times of year, for example to cover low milk sales when the cows are dry. Producers can manage their accounts online and speak to agricultural relationship specialists within the bank if they have any queries. “I have tested the online dashboard and it’s really user friendly – I can see how much I’ve borrowed, how much credit is available, and make repayments,” he explains. “As an agricultural bank, both senior and junior relationship managers all have a very good understand of farming, which is major strength and makes conversations easy.”

Part of Mr Hartman’s job is to keep the bank’s staff appraised on sector news. “If a processor’s milk price changes or input costs move sharply then I’ll update them so that they have all of the information they need.”

Tim Coates, co-founder of Oxbury, and farmer, explains: “As a bank which is 100% focused on agriculture, we truly understand farming and know the challenges that producers face. Everything we do is aimed at helping farmers to achieve maximum stability and productivity year-on-year.”