Please complete the form below and we'll contact you about your appraisal.
Despite the current drop in cereal, milk and beef price, the scarcity of available land continues to drive the land values onwards and upwards. This coupled with a difficult lending environment, makes growth a challenging prospect for some farmers. Rob Bishop, Director of Woolley & Wallis Finance, looks at the lending environment and what farmers need to consider when trying to secure finance.
Farmers remain the primary purchasers of farmland in the UK, but this expansion now requires a greater level of funding support than ever before with the land market remaining very buoyant due to the continued demand for property and the scarce supply.
Whilst Banks like lending to farms as they are generally a safer bet than other businesses, they are nevertheless becoming more demanding in terms of information required of an applicant due to today’s stringent lending criteria and ever increasing regulation. It has never been more important to find the right lender and to approach them with the right information. Farmers need to address a number of questions before they approach a lender for finance to increase their chances success.
The first step is to find a lender and manager that specialises in farm finance; often who you approach within an organisation can make a big difference. High street lenders are not all sensitive to the needs and peculiarities of the farming industry such as seasonal cash flows, weather and commodity risk, and not all take comfort in the often substantial current assets of stocks and livestock which can often be as valuable as the land offered as security.
All loans involve some level of risk. A lender needs to determine how much risk they are willing to take to give a loan. The business plan, financial projections, or other documentation you provide helps the lender evaluate the risk. They will expect you to have a sufficient understanding of your business to provide them with information to assess:
When it comes to agricultural finance, specialist knowledge is vital for developing a robust plan and delivering a positive outcome. Woolley & Wallis Finance Limited have been trading since July 2013 and acting as Brokers have to date secured circa. £35m of funding for farming businesses. If you would like to discuss a funding requirement or get a second opinion on the support offered by your banker please contact Rob Bishop for a free initial appraisal.
Director, Woolley & Wallis Finance