Funding for energy farming

Concern about the environment has meant that green energy has become mainstream. Farmers can now choose from several different methods of generating energy from their land. 

There are many ways in which renewable energy can reduce outgoing costs and provide a source of secondary income. There are several renewable energy technologies to consider.

Solar is one of the most straightforward energy solutions. Solar panels are relatively quick and easy to install. They are also highly efficient, and just a few panels are often enough to offset the farm’s energy needs - while a large array can provide substantial amounts of energy to sell on. Solar panels can also be placed on land which can’t easily be used for crops or grazing, helping turn land that is otherwise of no economic use into a source of income.

Biofuel production has grown more popular in recent times, and which provides a highly flexible source of fuel for pastoral farms. A biofuel plant turns manure into fuel for the farm’s equipment, or for resale. Anaerobic generation can be used in similar ways but may be best suited for larger operations.

Air and ground source heat pumps allow farmers to harness free thermal sources to heat their buildings, which makes keeping animals and birds warm in winter a much easier - and less costly - task.

Green Energy solutions include:

• Anaerobic digestion
• Solar generation
• Biofuel production
• Wind turbines
• Heat pumps

However, installing any form of eco-friendly generation is costly. A new solar energy plant, for example, could cost £½million for a 5-acre site producing a megawatt. Though it may prove highly profitable in the long run, the capital investment to set up an energy generation plant required is substantial.

The solution can be Bridging Finance to cover the costs of starting a renewable energy project. A Bridging Loan is a high-value short-term loan that is secured against the assets such as property. Because they are secured, Bridging Loans can be offered for larger purchases than a typical personal and business loan.

Bridging Loans combine the size and security of a mortgage with the speed and flexibility of personal lending.

They can be put into place in just a matter of days and can be tailored to income needs. Many bridging providers will allow their customers to “roll-up” interest until the end of the loan, which means that there are no costs while the energy plant is built and set up. 

Bridging Finance can be secured against nearly any asset, although property is most often used. Some lenders will accept a second charge security, meaning that the loan can be against a property which is already subject to 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.

How much will a bridge cost?

Several factors will influence the cost of a Bridging Loan, including your “exit strategy”. This is how you intend to repay the loan.

So, for example, you could raise funding on a farmhouse to buy wind turbine installation. Once you have built the energy plant, you can use the future profits that it creates to pay off the loan - your 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 will be agreed at the time of setting up the loan.

Why you need Rangewell to set up an energy funding plan

Like all Bridging Loans, energy project funding is designed to be set up fast. But unless you have expert help, you can find it difficult to get the most competitive deal. 

At Rangewell, we can help you find the deal for the loan you want.

Our knowledge can not only help you secure the funding you need for your energy project - from a few £thousand to £millions - it can save you a great deal of cash.

However, it's important to remember that Bridging Finance is 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 agricultural sector can be an important asset for your business. Call us to find out more.