Quick answer
Farm shed and infrastructure loans fund the fixed assets a property runs on: machinery sheds, hay sheds, workshops, stockyards, fencing, dams, bores, roads and power. Because these items are attached to the land, lenders often lend against the property. Ownright Custom Finance arranges farm infrastructure finance Australia-wide, with repayments shaped around farm income.
Key points
- Sheds, yards, fencing, water and power can all be funded
- Fixed assets usually sit under the farm property as security
- Staged drawdowns can match progress on a build
- Better infrastructure can lift productivity and property value
- Suits
- Graziers, croppers, dairy and horticulture operators, lifestyle owners
- Security
- The farm property, sometimes with extra security
- Structures
- Top-up, construction-style draws or equipment finance
- Australia-wide
- Yes
What are farm shed and infrastructure loans?
These are loans for the fixed improvements that keep a property working. Think machinery sheds that protect expensive equipment, hay sheds that save feed, workshops, calf and shearing sheds, stockyards, cool rooms, laneways, fencing, bores and dams, power connections and access roads. The work is usually quoted by a builder or contractor, and the loan is repaid from the farm’s income over time.
Because these items are attached to the land, a lender cannot easily seize and sell them separately. That is why most infrastructure lending is secured by the farm property itself. The loan may be a top-up to an existing facility, a new loan, or a staged facility that releases money as the work progresses.
Who uses this kind of finance?
- Cattle and sheep producers upgrading yards, fences and handling facilities
- Croppers adding machinery sheds or workshops
- Dairy farmers improving sheds, effluent systems and feed pads
- Horticulturalists building packing sheds, cool rooms and netting structures
- Poultry and pig producers upgrading housing and ventilation
- Lifestyle landholders improving sheds, fencing and water for acreage
- Families preparing a farm for succession or sale
What do lenders look at?
The property. Location, productive capacity, existing improvements and the value the project may add. A lender may ask for a valuation that considers the property before and after the work.
Existing debt and equity. How much is already borrowed against the farm and how much room remains. This is usually the main limit on borrowing for improvements.
The project. A clear scope, quotes and a realistic budget. Builders with a good track record reassure lenders. Where council or planning approval is needed, it should be in order.
Cash flow. Whether the farm can carry extra repayments, including in a poor season. Our guide on drought and farm cash flow explains why lenders think about downside scenarios.
The borrower. Credit history, farm experience and the structure that holds the land.
Which funding structure suits which project?
| Project | Common structure | Notes |
|---|---|---|
| Small repairs and fencing | Top-up or operating facility | Simple and quick if equity is available |
| New machinery shed | Top-up or staged loan | Quote, approvals and equity are key |
| Large build such as a dairy or packing shed | Staged construction-style loan | Progress payments follow completed stages |
| Water infrastructure | Property-secured loan | See water and irrigation finance |
| Movable equipment | Equipment finance | The equipment is the security |
How Ownright approaches farm infrastructure
Trevor Scott’s rural lending background means we see infrastructure as an investment decision first and a lending question second. We ask what the work will do for the farm: save labour, protect assets, lift productivity, enable a new enterprise or simply replace what has worn out. That helps us present the project to a lender in terms that matter.
We then check the debt position. Sometimes the best approach is to combine the project with a broader restructure, for example folding a few smaller loans into a single facility. See farm debt restructure and farm development loans for related options. If a bank has said no, we look for lenders more comfortable with the property or the borrower. We work in every state and territory, including remote regions where builders and suppliers are far away and timing is harder.
An illustration
Illustrative scenario only. A grazing family needs new cattle yards, a hay shed and a length of boundary fencing before their next big sale. The property carries moderate debt and has good equity. A broker could arrange a staged facility secured by the farm, with the fencing and yards drawn first and the shed drawn on completion, and with repayments set to follow the sales calendar.
Should I build first or finance first?
Finance first, or at least talk to a broker first. Ordering materials or signing a builder’s contract before the loan is settled can leave you carrying costs you cannot fund. A lender may also want a valuation or approvals before releasing money. If you are mid-project and cash is tight, tell us early: there may be a way to refinance work already started, but it is harder than planning ahead. Our guide to progress payments shows how staged funding works.
Mistakes to avoid
- Signing a builder’s contract with no finance in place
- Underestimating site works, power and access costs
- Skipping council or planning checks on larger structures
- Borrowing to the limit with no buffer for cost overruns
- Failing to compare a top-up with a separate facility
- Overlooking insurance on new structures
Documents to have ready
- Quotes or a builder’s estimate with scope and timeline
- Plans and approvals if they are required
- Farm financials, tax returns and BAS
- Current loan statements and an asset and liability schedule
- Photo ID and title details for the property
See the documents checklist and our guide to how farm loans work for more.
How do lenders value new sheds and improvements?
A shed or set of yards does not add its build cost to the property’s value dollar for dollar. Valuers consider whether the improvement suits the district, whether it is built to a standard buyers expect and whether the property could be sold with it later. Purpose-built items for one enterprise, such as a specialised processing room, may be worth less to a buyer than general-purpose sheds and fencing. A lender may therefore lend against the property’s existing value and treat the new work as a productivity investment rather than extra security. Our guide on what lenders look for in farm valuations explains this in detail.
What about tax and depreciation?
Many farm improvements have special tax treatment, and the rules can change. The ATO publishes guidance for primary producers on deductions and depreciation for items such as fencing, water facilities and fodder storage. We do not give tax advice, so check with your accountant how a project will be treated before you commit. We can then structure the loan with your accountant’s plan in mind, including timing the draw of funds around the financial year if it is relevant.
Ready to build the farm you need?
Sounds like you’re looking for finance for sheds, yards, fencing or other farm infrastructure. We’re the lending experts in funding the fixed assets that keep farms productive, so click the button below and see if you qualify, or give us a call on 03 7043 7233.
How it works, step by step
- 1
Step 1
Tell us what you plan to build or upgrade, with quotes or a builder's estimate.
- 2
Step 2
We assess the property, the equity and whether this is a top-up, new facility or staged loan.
- 3
Step 3
We approach lenders comfortable with farm improvements and your type of operation.
- 4
Step 4
Funds are drawn as the work proceeds or the invoices fall due.
Frequently asked questions
Can I borrow to build a shed on my farm?
Yes, commonly. The loan may be a top-up to an existing farm facility or a new loan secured by the property. Lenders want a quote, a builder or supplier, and approvals where required. Because the shed becomes part of the land, it is not usually security on its own.
Do I need council approval before finance is approved?
Often a lender will want to see evidence of any required approval before funding a build, though rules differ between councils and states. Smaller rural structures may be exempt in some areas. Check with your local council and give us the details so we can plan the timing.
Can fencing and water infrastructure be financed?
Yes. Fencing, troughs, pipelines, dams, bores and tanks are common improvements, and lenders generally see them as supporting productivity. They are typically funded through a property-secured loan rather than as separate assets. A clear scope and quotes help the application.
Is it better to use a progress draw or a lump sum?
For larger builds, progress draws are common because funds go out as stages are completed. This limits interest costs and gives the lender comfort. For small purchases, a lump sum or top-up is simpler. We explain how each would work with your builder or contractor.
Can I finance infrastructure on a lifestyle property?
Yes, though lenders assess hobby and lifestyle properties differently from commercial farms, usually leaning on household income. Sheds, fencing and water improvements can still be funded. Tell us how the property is used and we will explain the likely approach.
What if a bank has already declined my infrastructure project?
A decline does not mean the project cannot be funded. It may be about the lender's policy on the property, the existing debt or the borrower's paperwork. We find out why and look at other lenders and structures, including private options if the situation calls for it.