Finance for livestock

At the same time, there is the constant demand from buyers for costs so low that some sectors are starting to seem no longer economically viable.

The end of EU subsidies will change the financial certainties. There may be a greater demand for homegrown food, and some areas, like the organic sector, may even experience increased demand.

The one thing that you may be certain of is that your farming business will need to access finance to remain afloat.

Of course, finance is changing too. Once, arranging the finance you needed meant a trip to the bank. These days, there are many more lenders and many new types of funding for you to take advantage of.

Funding options for your farm

The first step in securing the funding you need for the future of your farm - or your farming-related business - is to look at the different types of finance available. Matching your funding need with the right type of finance can reduce your costs, save you time, and make it easier to turn your plans into reality.

Fortunately, there are funding options which can help you finance the equipment you need.

They include:

• Funding for agricultural land
• Funding for equipment with asset finance
• Asset Refinance
• Funding for plant and energy installations
• Finance for livestock
• Funding for feed
• Funding business acquisition
• Helping Tenant farmers become landowners

Funding for land

Buying land to work, or acquiring an entire farm, may be part of your strategy for the future. The price of agricultural land varies greatly across the country, but any acquisitions are likely to require large-scale funding.

Commercial Mortgages can be used to buy any kind of commercial property, including agricultural land, premises or an existing business. Repayments can be spread over up to 25 years, and interest rates are agreed on an individual basis.

However, a Commercial Mortgage may take time to arrange. Bridging Finance can be used to provide fast access to funds if you are buying a property at auction, or waiting for a mortgage to be approved.

Commercial Property Finance is arranged on an individual basis. Get our help finding the most competitive lender.

Funding for equipment

Machinery and vehicles are becoming ever more important to drive efficiency and profitability on farms.

It is more than simply buying tractors with GPS. There is a growing range of farm automation that you can’t afford to be without, from robotic milking parlours to drones.

Asset finance can help make the equipment you need more affordable, by spreading the costs over time. Your new equipment can pay for itself from the extra productivity and revenue it generates.

With Asset Finance, the funds you need are secured on the asset itself. This means that if you were unable to make the repayments the lender would simply repossess the asset. It can also reduce the cost of the finance, as lower risk to the lender usually means lower interest rates to you.

There are many types of farm machinery that can be acquired with Asset Finance:

• Dairy machinery - Milking equipment, housing and sheds
• Poultry houses - from barns to intensive facilities
• Feed stores - grain sheds, stores and silos
• Farm buildings - barns, sheds, shelters, extensions
• Loader equipment - trailers, trucks and conveyor belts and telehandlers
• Tractors, together with accessories
• Vehicles - ATVs and livestock transport

There are several different types of finance options for farming equipment:

Hire Purchase

Hire Purchase lets you hire equipment, vehicles and buildings until you have paid for them. Agreements generally last between 12 and 72 months and require a 10-20% deposit plus fixed monthly instalments, after which the equipment becomes yours. HP may be most suitable for equipment you will use for the long term.

Leasing

Leasing is much like a rental agreement. You pay a monthly charge to use the asset. With some arrangements maintenance, repairs, and registration will be the owner’s responsibility. It’s common for things, such as tractors and other vehicles, which will have a limited life – it means you can easily update your equipment when you need to.

Contract Hire

Contract Hire is also used for farm vehicles. Payments are calculated on the purchase value less the estimated value of the vehicle at the end of the agreement. This helps keep monthly repayments down, and makes it simple to switch to a new vehicle at the end of the agreement.

Our Asset Finance team can help you lease or Hire Purchase almost any type or value of farm equipment, new or used. Find out more here.

Refinance Existing Assets

Your farm has probably already invested heavily in equipment. Asset Refinance lets you use that invested money again, while retaining full use of your assets. The finance company will buy the asset from you, providing you with the cash sum you need. They then let you buy the asset back from them, with a new finance arrangement.

You can use your cash again, or simply use a refinance arrangement to reduce your monthly outgoings. Find out more here.

Why arrange your own finance?

Equipment vendors may offer finance arrangements to support their sales. But their finance plans may be designed to support their business rather than yours. Arranging your own finance from a specialist lender can be more cost-effective and mean substantially reduced costs.

Funding for plant and energy installations

Anaerobic Digestion (AD), biomass, wind and solar power are all becoming key to efficient farm businesses.

Hydropower is also becoming a possibility in some locations.

They represent major investments, and may involve complex ‘jigsaw funding’ with finance arranged from a number of sources, including grants, Asset Funding and lending.

Our experts can help you find solutions for the level of funding you need. 

Funding for livestock

Livestock has historically been bought with cash reserves or overdrafts. It is possible to provide lending solutions for the livestock you need, supporting your drive to build your herd, improve genetics across your stock.

Our funding solutions can include:

• Dairy
• Pedigrees
• Sucklers
• Beef
• Poultry

Our experts can help you find the finance for livestock farming you need. 

Funding for feed

The costs of feed fluctuates, especially in winter, and represent a major expense.

Dealing with the costs can eat into your working capital. The costs of running your farm will not stop there. Wages, diesel and vet bills all mean ongoing expense.

We can help arrange short-term Working Capital Loans to deal with the costs. Find out more here.

Funding for building or buying a farming business

Building or buying your farm business will demand investment. While your bank may still be able to provide lending, there are now many other providers who may be more willing to lend, and may be able to offer more attractive rates.

Most business loans are based on monthly repayments. However, there are lenders with experience in the farming sector who understand the pressures of seasonal cash flow. They may be able to make arrangements for quarterly repayments, or even special lending agreements to reflect seasonal income streams.

Unsecured Business Loans don’t involve holding any assets as security against the loan, which is repaid in monthly or quarterly instalments over an agreed term, usually under 5 years. Modern lenders can provide fast unsecured lending, but you might need to provide a personal guarantee.

Unsecured loans can be arranged to provide as much as £350,000, but borrowing at this level may be more cost-effective with a Secured Loan.

Secured loans are ‘secured’ because the lender will require security in case you cannot pay the loan back. This could be your home, or business assets, such as your land itself.

You can have longer to repay, and enjoy lower interest rates, meaning monthly repayments can be smaller and easier to fit in with your cashflow.

Even if your business does not have the long trading history and profit record that lenders usually require, there are lenders who can help. We’ll discuss your needs, and help you find the kind of loan to fit your business needs.

Helping tenant farmers become landowners

Buying your farm tenancy might sound impossibly ambitious, but it may be possible with a Commercial Mortgage.

You can borrow up to 60% of the full value of freehold land, which your tenanted farm will become, on completion of the sale. Loans can last for up to 30 years, and can pass from generation to generation, so don’t need to be repaid if the borrower dies.

Find out more about lending to help tenant farmers buy their farms. 

Funding to support your cashflow

Cashflow is a major challenge for every business. Having to wait weeks or months for invoices to be paid by produce buyers can trigger a cashflow crisis, but there are ways to help.

Invoice Finance provides cash advances based on the value of invoices you have issued, but have yet to be paid for – in effect letting you get paid as soon as you invoice.

Both Invoice Factoring and Invoice Discounting allow you to release the funds you need as soon as the produce leaves your farm.

How we help you capitalise your farming business

At Rangewell we work across the entire lending industry, and we have finance experts with personal experience in the needs of the agricultural sector.

That means we can provide a unique service. We will help you to find the most appropriate funding from lenders across the market – from established high street banks to alternative funding suppliers. Our specialist teams, experienced staff and land agents can give you all the help you need to develop a proposal and choose the right loan - even if you're looking for the finance to diversify your farming business.

Simply call us to see how we can help your farming business find the cash you need to succeed.