Today, the problem of the agricultural market is not only the decline in grain prices or the increase in costs. One of the main problems is the shortage of working capital among agricultural producers. A farmer needs to buy seeds, fertilizers, crop protection products, fuel, spare parts, and pay for services. But the money from selling the harvest may come later. The farmer does not want to sell part of the production now due to low prices, and another part of the funds has already been allocated to salaries, land rent, taxes, and repayment of previous obligations.
As a result, the supplier hears a familiar response from the client: “I need the product, but I don’t have the money right now.” Previously, after such a response, the sale would most often stop. The supplier would either refuse the client or provide their own payment deferral and take all the financial risks themselves.
Today there is a third option – to offer the client financing directly at the point of sale.
The client is not refusing the product – they simply do not have the funds right now
For the supplier, it is important to correctly understand the reason for the refusal.
In many cases, the farmer needs the product. They understand that without fertilizers, seeds, crop protection products, or fuel, it is impossible to conduct the season. But a time gap arises between the need for the product and the ability to pay for it. This means that the problem is not always in the price of the product or in the manager’s work. The problem may be that the client does not have sufficient working capital at a specific moment.
If the supplier can help close this gap, they gain the opportunity to:
- not lose the sale;
- retain the client;
- increase the average transaction size;
- receive funds faster;
- not create their own accounts receivable;
- increase client loyalty.
Thus, the financial solution becomes not a separate service, but part of the supplier’s commercial offer.
Sell with the client in mind
In a market where clients have sufficient funds, the manager sells a product: seeds, fertilizers, crop protection products, equipment, or a service. When working capital is insufficient, this is no longer enough. The supplier must offer the client not just a product, but a complete solution: product + the ability to finance its purchase + a clear payment schedule.
In other words, the manager’s conversation with the farmer must change.
Instead of:
“We will ship the order as soon as we receive payment from you”
it is worth asking:
“We are shipping your order today, and you can pay in 3, 6, or 9 months”
After this, the supplier can offer a financial instrument that will allow the farmer to purchase the necessary resource today and settle later – after selling the harvest or during another agreed period.
How a supplier can finance their client
It is important that the supplier does not necessarily have to finance the client with their own funds.
The company can integrate a financial solution into the sales process. The farmer selects the product, submits a financing application, undergoes assessment, and after approval receives the necessary products.
The supplier receives payment from the financial partner according to agreed terms, and the farmer settles according to the established schedule.
This is exactly how the embedded financing model works.
For the agricultural market, such a solution is implemented through WEAGRO – an online agricultural installment financing service created by Activitis fintech infrastructure.
In practice, this means that the supplier can add another payment option to their offer:
- full prepayment;
- partial payment;
- own payment deferral;
- financing through WEAGRO.
The client gets a choice, and the supplier gets an additional tool to close the sale.
Today, the one who helps the client buy is the one who sells
During a period of working capital shortage, it is not enough to have a good product, warehouse inventory, and a strong sales department.
You need to give the client an answer to the main question:
“How can I purchase this product if I don’t have the full amount right now?”
Suppliers who can integrate financing into their sales will gain the opportunity to maintain volumes, accelerate cash inflows, and reduce dependence on their own payment deferrals.
And farmers will gain access to the resources necessary to conduct the season.
That is why today financing is not an additional option to the sale.
It is a tool that helps the supplier sell, the farmer buy, and both parties maintain business stability.
