Rural Bridging Loans For Farmers

Greater investment can help farmers generate greater profits. Arable farms can expand their acreage or invest in new equipment. Pastoral farms invest in new accommodation for livestock. All farmers can invest in new technology from tractors with GPS to biofuel.

Growing a farm business can mean economies of scale. Growth requires investment, which many farmers can struggle with due to a lack of ready access to cash. Despite often owning multiple valuable assets, farmers rarely have the capital required to make oppiortunistic investments. Lenders are also slower and more hesistant in offering agricultural lending.

The solution is to pursue bridging finance, which offers a fast funding option that allows you to grow your business in a way that suits you. Rural bridging loans can be raised quickly and deliver cash to your bank in a matter of days, which makes them perfect for anything from acquiring a new property at auction to buying a neighbouring farmer's land at short-notice. 

What is a Bridging Loan?

Bridging Loans are large-scale, short-term loans which can be set up fast. They can be used to seize an opportunity before a long-term source of funding can be arranged. They are so-called because they “bridge the gap” until longer-term finances can be put in place.

Farm bridge loans allow a farmer to buy land at auction, or help fund a gap in capital when a quick sale is required. After you have raised the bridging loan, you would then be able to refinance into a longer-term option such as a mortgage, which would repay the Bridging Loan. Unlike a mortgage, where negotiations can take weeks, a bridging loan can be raised quickly to avoid you missing out on a bargain opportunity. 

Agricultural bridging loans is secured on property. It is most often used to buy the property it is secured on, but it can also be used to raise funds on property that is already owned, providing a cost-effective solution for raising short-term cash for virtually any need.  

Farmers who own land may also be able to raise a land bridging loan, which is an alternative form of lending specifically for land that is not built on. 

Why use Agricultural Bridging Loans?

Loans for farmers can be complex and borrowing may be limited if you are deemed high risk. Lenders are more flexible with bridging loans, making them the ideal choice for farmers who require a high level of funding, but who will inevitably face fluctuations with their income and capital reserves. 

Rural bridging loans have several advantages:

• Fast - Bridging finance can be arranged in days and cash can be issued quickly
• Flexible - loans can be tailored. Terms can be extended, interest rolled up repayment schedule planned on an individual basis 
• Versatile - loans can be used for any purpose from buying land to building a new structure or facility on your farm
• Scale - Bridging Loans are available from as little as £10,000, up to millions of pounds. 

Bridging loans can be secured against nearly any asset, although property is most often used. As a farmer, that often means you can leverage farming assets and buildings. You can even use land, but this is treated as a unique land bridging loan product.

Some lenders will accept a second charge security, meaning that the loan can be against a property which is already under finance such as a mortgage.

It can also be fast. Unlike high street banks, Bridging Lenders can turn a loan from application to approval in a very short space of time - often less than a week, and sometimes in as little as 48 hours.

Bridging loans for equestrian properties

If you're considering raising funds for an equestrian property, such as funding the development of a stable, a rural bridging loan is a suitable product. Raising and keeping horses is an added risk that makes traditional finance even more limited, making the flexibility of bridging finance more appealing. 

In much the same vein as using a bridge loan for acquiring different types of farm property, you can raise a farm bridge loan as a short-term solution by securing it against existing land or assets. Once you've acquired the property or developed it, you'll need to either repay the loan or switch to a longer-term option. 

Rangewell can help you negotiate with lenders and find a suitable long-term equestrian property loan. In some cases, we can arrange for an equestrian commercial mortgage to spread the cost over as long a term as possible. Get in touch now to learn more. 

How much will a farm bridge loan cost?

The cost of a rural bridging loan reflects the scale of lending that is required and are usually a short-term funding solution.

Several factors will influence the cost, including the “exit strategy” - how the borrower intends to repay the loan.

So, for example, a farmer may raise funding on his farmhouse to buy additional productive acreage at an auction. Once he has secured the land, he can arrange a mortgage, or use future profits as an exit strategy. Bridging providers will work flexibly with their customers to determine whether their exit strategy is viable.

In addition to a monthly interest cost, lenders may charge a lender arrangement fee – a fee for setting up the loan.

All costs for finance will be pre-agreed when the loan is set up.

Why use Rangewell for rural bridging loans?

Agricultural bridging loans are intended to let you deal with urgent funding needs, or to take advantage of business opportunities that have to be dealt with fast.

With help from the property funding experts at Rangewell, all bridging loans can be set up within a matter of hours, and funds released in as little as 72 hours.

What’s more, we can help you find the most competitive deal for the farm bridge loan you want.

Our knowledge can not only help you secure the funding you need for your development project - it can save you a great deal of cash. We can even help you with re-bridging an existing bridging loan.

Bridging Loans are only usually designed for short-term use. We not only have the expertise to help you use them as a tactical source of funding for the short term, but we can work to find the most competitive source of long-term funding to replace them.

Our knowledge of funding solutions for the property sector and agriculture sector can be an important asset for your business. Call us to find out more.

Other types of agriculture finance include:

• Funding for agricultural equipment
• Land purchase
• Change of agricultural use
• Diversifying your farming business
• Restructuring your farm

FAQs

Can I get a rural bridging loan with bad credit?
Yes, though you may need Rangewell's support during your application. If you have poor credit your offers will be more restrictive and you may need to offer better security. 

What are the interest rates for rural bridging loans?
Interest rates for rural bridging loans are higher than traditional loans. The rates are offered based on your loan amount, term and your risk profile. 

How fast can I get a rural bridging loan?
Rural bridging finance is one of the fastest forms of finance to arrange. Rangewell can help you secure a loan in a matter of days, with funds available in your bank.  

What fees are associated with rural bridging loans?
Typical fees include arrangement fees, legal fees, valuation fees, and exit fees. Rangewell can help you navigate costs and fees so you don't get hit with any nasty surprises. 

What types of property can be used as security for a rural bridging loan?
Virtually any type of property that has associated value can be used as security, from farm buildings to your home. Some lenders may also accept mixed-use properties or land intended for development.