As I am sure you will agree, it has been increasingly difficult to get funding over the last 5+ years. This is due to a number of factors including changes in Financial Services Regulations, a reduction in local Relationship Managers across the high street Banks as well as some difficult periods experienced in the Agricultural industry.

With changes already underway to subsidy payments, Agricultural businesses are facing a significant change in their income streams with a potential impact on profitability. This makes it the perfect time to sit down and look at what you want to do with the business going forward and what financial support you need to do it.

For many, you may simply want to continue as you are, in which case this could mean working with your professional advisors to ensure you are on the best schemes available for your farm and review your costs. Whilst looking at costs don’t overlook your existing borrowing. Restructuring your debt commitments could reduce your monthly outgoings and improve cashflow.

For others you may want to expand the existing business. Does this mean buying more sheep/cows, more storage sheds, increased feed costs? Work out the numbers before approaching a funder or broker. How much additional income will there be and what are the associated costs – net profit and cash generation are key to borrowing for expansion.

Maybe you want to go big?! If you have a successful operation you may want to replicate it on another farm. 

Perhaps you are considering diversification. As a result of Covid, the last 18 months has seen a boom in “staycations” and the popularity of UK holidays looks set to continue. There are a huge range of leisure and tourism diversification options available to agricultural businesses.

Everything from pods and holiday cottages through to outdoor adventure centres and forest schools can provide you with an additional income stream and can be very successful if they are planned and managed well.

Do your homework! Put the time into planning for your funding proposal, make sure that your idea will work for you and your business, not just financially. Cover off the risks, don’t just assume that everything will go to plan. Build in a contingency – will it still work if sheep prices drop by £15 per head, if milk price drops to 26ppl or your holiday cottage occupancy rates are 40%.

At Lakeland Commercial Finance we work closely with all the high street Banks as well as specialist Agricultural Banks and Finance providers, with access to exclusive funding options for our customers.

We have access to a range of products including short term finance which would enable you complete a diversification project or could be used to purchase a new farm whilst yours is on the market so that you don’t miss out!

We can access 25 year money which gives you the peace of mind that your interest rate will not be changed throughout that period (unfortunately we can’t say the same about Bank of England rates!). We can even work flexibility around how and when you make your loan repayments so it aligns with your business’ seasonality and cashflow.

When looking at a diversification project you may want to keep this as a stand alone business which could enable you to access funders who may not normally be associated with Agricultural businesses but who may be able to to lend for the new business venture.

Perhaps you are looking to build a property on your land for family, even with an agricultural tie, we have funders who are able to support you with this.

You may just need to free up some cash or want to buy some machinery from a neighbour. There are a range of asset backed funding options available for cash release, second hand machinery purchases, privately purchased machinery, even new machines.

There are many funding options available and it may be that this is the first time you are looking somewhere other than your existing Bank for finance. With experienced Agricultural Relationship Managers in our team who understand the industry, we work with you and our panel of funders to source the best finance package for your business.

You will already be working with professional advisors, such as accountants, solicitors, land agents and consultants who are experts in their field. We are experts in our field of finance and we are here to help you with your funding needs.