Agricultural financing options

Agricultural financing options
 

The majority of agricultural funding is achieved by one of the following means:

Securing a Bank Loan – Farms and estates can have complex ownership with farms typically being owned by parents or perhaps a number of individuals in partnership. The operational farming business is often operated through a company where the shareholders may differ from the landowners. Finance may be possible through traditional business loans secured by mortgage. Your lender will want to make an informed decision on whether to advance funds, so it’s our job to check every aspect of the farm or estate, particularly the property elements, such as rights, reservations and covenants.  We’ll also check each area of your business operation to make sure you have all the right agreements in place to satisfy your lenders requirements, particularly those relating to tenancies.  Our agriculture team will guide you through any additional bank documents you will need, including deeds of priority and inter-creditor agreements.

Private Funding – Private funding is still quite common  in the agricultural sector as it helps parents to assist the next generation with setting up or expanding a business.  We’ll work with you at each stage of the process to make sure it is set up and documented accurately and reflects your requirements.  We’ll make sure your interests are thoroughly protected, whether the funding is in the form of a loan or a longer-term investment.  

Pension Funding – In the current market using a pension fund to purchase land is becoming an increasingly popular option as it can not only give business owners greater control, it can also improve cash flow. Your land transactions can be funded solely through a pension fund or by a secured on an agricultural or commercial loan to your SIPP or SSAS. We have extensive experience of pension related funding including the use of Exempt Property Unit Trusts (EPUTs) and we can help simplify the complexities for you.

Guaranteeing Loans – While bank funding remains tight, it’s hardly surprising that many funders and investors are looking for further comfort before parting with their money. Depending upon the security you can offer, your funder may look for third party guarantees, such as personal guarantees or cross-company guarantees. For a farming business this can mean securing funding against the farm or the company operating business. Guaranteeing loans can incur risks and you need to understand your liabilities. We will make sure your risk is minimised and that you are fully aware of your current and future liabilities.See our Factsheet on Etridge

Whether you choose a simple or more complex funding option for your agricultural and rural property transaction, we can guide you through the complexities and regulations so that you can get on with running your business.