Crowdfunding could drive investment in niche rural properties

The Australian Farm Institute has examined crowdfunding as a possible funding model for rural properties in Australia.

It sounds like a far-fetched idea, but the Australian Farm Institute (AFI) is reporting that crowdfunding could become a legitimate farm funding model into the future.

Crowdfunding gives anyone the ability to pitch an investment opportunity on a web platform.  Personal investors can then choose to put money towards the venture through payments over the internet.

While the AFI describes crowdfunding as “disruptive to traditional funding methods”, it proposes that the method could suit smaller farming businesses.

As the nature of rural property and farming businesses continues to evolve, new funding models are being explored to ensure the financial needs of the farming sector are met in the future.

“Investing through crowdfunding is a relatively new development and increasing rapidly,” the AFI reports.

“The regulations in place around equity crowdfunding limit its applicability for agriculture.

“Equity crowdfunding can only be accessed by public companies with assets or income of less than $5 million.

“Smaller or niche agribusinesses may fit well in this model.”

Although new models for financing farm businesses seem to be emerging, the AFI also pointed out that farmers struggled to access new opportunities due to a distinct lack of good financial services advice.

“There is an interest among farm business operators to explore more diversified options for obtaining capital,” the AFI reports.

“The demand for alternative financing models is being driven by the desire for a more liquid market for investment in agriculture, which will enable new entrants at both a retail and institutional level.”

Posted on Friday, 20 January 2017
in Latest News
Australian Farm Institute Crowdfunding Investment
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