Agricultural Loans

In an industry that is constantly evolving more and more farmers are exploring new ways to diversify and transform their rural businesses into vibrant, sustainable and profitable enterprises.  However, to achieve this often requires a significant amount of investment that isn’t always readily available. That’s why we’ve teamed up with UK Agricultural Finance, a specialist lender solely focused on the agricultural sector.

UK Agricultural Finance (UKAF) is a specialist business lender to the agricultural sector, providing traditional, responsible lending to farmers throughout England, Scotland and Wales to sustain, grow, improve and innovate their businesses.

A loan from UKAF is secured on your farmland and agricultural property, meaning you’re more likely to source capital. So, whether you’re looking to secure additional land, build a farm shop or install a wind turbine you’ll have access to finance that enables you to fulfil your business plans.

  • From £100,000 to £10million
  • Loan to value ratio of less than 65%
  • Typical duration of 12-84 months
  • Secured on farmland and agricultural property
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To find out more call UKAF today on 0333 400 1894 or email us at rural@ukagriculturalfinance.co.uk

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Business loans can be used for

 
Diversification
Supporting all types of diversification from holiday lets, to cafes and farm shops
 
Renewable Energy
Investing in biomass, hydro, solar and wind power
 
Purchase of Land
Helping to secure land or property that often becomes available at the last minute
 
Livestock Finance
Providing finance for auction purchases, B&B, heifer replacement or even a new milking parlour
 
Property Renovation
A loan to help repair or renovate your property, resulting in capital appreciation or income generation
 
Recovery & Restructure
Enabling you to rationally plan when under financial pressure and cope with expected and unexpected financial demands
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Case Studies

Bridge Loan: £445,000 Recovery & Restructure, Leicestershire
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Key Loan Terms

  • Amount:
  • £1,400,000
  • Term:
  • 30 months
  • LTV:
  • 65%
  • Security:
  • 1st Charge
  • Use of Proceeds:
  • Recovery & Restructure
  • Exit:
  • Selling assets and refinance
  • Rate:
  • 12%

Background

Why did the borrower need the loan?

A farmer who had been looking after a terminally ill relative needed access to capital to stabalise the business and repay trade creditors and HMRC.

Why couldn't they raise funds from traditional lenders?

The farmer had two outstanding CCJs from trade creditors and was about to be taken to court by HMRC making this too complex for traditional lenders.

Why were UKAF selected?

UKAF took the time to understand and work with an independent debt counsellor.

What did UKAF see that others didn't

UKAF saw an excellent farmer whose business had suffered due to family circumstance and who had the opportunity to get back on his feet.

What is the expected exit strategy?

The farmer has a number of options from a mix of property developments and consolidation of his existing business to one site.

Bridge Loan: £490,200 Property Development, Aberdeenshire
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Key Loan Terms

  • Amount:
  • £490,200
  • Term:
  • 30 months
  • LTV:
  • 43%
  • Security:
  • 1st Charge
  • Use of Proceeds:
  • Repay loan & working capital
  • Exit:
  • Refinance
  • Rate:
  • 12%

Background

Why did the borrower need the loan?

The farmer had a loan with a high street lender and wanted to increase available capital to redevelop a stone barn on his property.

Why couldn't they raise funds from traditional lenders?

Their bank would not take the time to assess the loan as the project was not immediately cash generative.

Why were UKAF selected?

UKAF visited the farmer to understand the collateral and what would need to be done to renovate the barns.

What did UKAF see that others didn't

UKAF saw a hard-working farmer who had a track record of renovating and leasing similar properties on his land.

What is the expected exit strategy?

Refinance to the high street lender, once rental income is established from the renovated property.

Term Loan: £2,300,000 for expansion capital, Wales
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Key Loan Terms

  • Amount:
  • £2,300,000
  • Term:
  • 84 months
  • LTV:
  • 60%
  • Security:
  • 1st Charge
  • Use of Proceeds:
  • Expansion capital
  • Exit:
  • Refinance to high street lender
  • Rate:
  • 7.5%

Background

Why did the borrower need the loan?

To install a new barn with biomass heating systems and drying floor for local heating of houses, milking parlour and drying 40 tpd of green bedding, as well as securing the Renewable Heat Incentive.

Why couldn't they raise funds from traditional lenders?

The farmer was locked into a long-term facility with a high street bank that was unwilling to help him expand the business at that time. The farmer decided to pay the high exit fees so that they could access new capital and grow their business.

Why were UKAF selected?

UKAF team’s thorough approach allowed them to have an unbiased assessment of the borrower, where their expertise spanning over 30 years was taken into account.

What did UKAF see that others didn't

UKAF appreciated that once the biomass facility became operational there would be a valuation uplift enabling herd expansion, supported by favourable milk prices.

What is the expected exit strategy?

Refinance to the high street lender supported by better cashflows due to increased profitability and the Renewable Heat Incentive.

Term Loan: £160,000 for farm diversification, Scotland
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Key Loan Terms

  • Amount:
  • £160,000
  • Term:
  • 84 months
  • LTV:
  • 39%
  • Security:
  • 1st Charge
  • Use of Proceeds:
  • Diversification
  • Exit:
  • Repayment loan
  • Rate:
  • 7%

Background

Why did the borrower need the loan?

To repay a short-term loan and upgrade the farm buildings, water and drainage and develop an old farmhouse and barn for holiday lets, while extending their rare-breed herd.

Why couldn't they raise funds from traditional lenders?

The borrower was highly credible and working in agriculture overseas on a contractual basis. However, as they were over 70, their bank had no interest in providing finance.

Why were UKAF selected?

UKAF understood the collateral, and after a thorough assessment the borrower passed their affordability tests.

What did UKAF see that others didn't

UKAF were able to see a remote location that is close to a famous golf course and likely to be popular with tourists. The borrower was energetic and actively engaged in every detail of the development, giving them confidence in their plans to diversify into holiday lets and expand their rare breed sheep herd.

What is the expected exit strategy?

Repayment loan from a high street lender.

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To find out more call UKAF today on 0333 400 1894 or email us at rural@ukagriculturalfinance.co.uk