What the annual review is for

Most farm facilities are reviewed once a year. A facility is any loan or limit the bank gives you, such as an overdraft, a seasonal facility or a term loan. At the review, the bank asks for up-to-date figures so its credit team can decide whether to carry on, change or renew your facilities.

A review letter on its own is not bad news. It's the bank doing what your facility letter said it would do.

What the bank is asking

When a credit officer opens your file, they're asking a few plain questions:

• Can the business carry its debt? That's about what you own and what you owe.
• Can it repay the debt, even in a poor year? That's about profit and cashflow.
• Does the person running it know their numbers? That's about you.

They also weigh up your industry, using the bank's own history with pigs, cattle or sheep. You can't change that part, but you can change how the others look.

Reading the review letter

The letter usually has four parts:

1. The facilities being reviewed, with limits and expiry dates. Check them against your own records.
2. The documents wanted, such as last year's financial statements, a budget and cashflow, and a statement of assets and liabilities.
3. The due date. Circle it. If it falls in a busy month, plan around it now.
4. Anything new. Look for words like "conditions", "covenant", "valuation" or "reduce". If you see one, ring the bank manager and ask why.

Our guide to reading the review letter goes through it line by line.

Why the due date matters

Most loan agreements require you to send financial information. The Banking Code of Practice is a set of promises made by the banks that sign up to it. For small business customers, it lists not providing financial information your agreement requires as one of the defaults, other than missed payments, that a bank can act on. It also says the bank must give at least 30 days' notice of such a default.

None of that should come into play if you keep the bank informed. If your accountant is behind, ring the bank before the date, explain, and confirm the new date by email.

Under the 2025 Code, a small business is one with turnover under $10 million in the previous financial year, fewer than 100 full-time equivalent staff and less than $5 million in total debt to all credit providers. Many larger farms won't meet that test. Your bank must have signed up to the Code for it to apply, and a solicitor can tell you what your own agreement says.