Playing a crucial role in helping rural economies across the UK, agriculture is often considered the backbone of the UK. Beyond providing food and raw materials, farming helps support communities and a way of life that has shaped the countryside for generations. 

However, rural farming areas are facing significant challenges. Whether that be ageing infrastructure, market volatility or the adjustments brought along by various policies. With all of this change, agricultural loans are demonstrating themselves as a vital tool, not just to help individual farms, but helping growth across rural Britain and in turn helping rural economies.  

Direct support for farmers and farm businesses 

Agricultural loans deliver direct and immediate benefits to farmers and farm enterprises and come with a variety of benefits, including: 

Improved productivity

Access to finance allows farmers to replace outdated equipment and adopt cutting-edge technologies to improve productivity. These improvements lead to greater efficiency and higher yields, securing a stronger future for farming businesses. 

Sustaining farm businesses

Farming is inherently seasonal, and cash-flow gaps are a reality for many. Loans provide a financial lifeline, helping farmers manage unexpected challenges such as poor harvests, rising input costs, or shifts in market demand. 

Enabling growth

With the right funding, farms can expand their operations, from purchasing additional land, diversifying crops or entering new markets. Growth at the farm level creates a ripple effect, boosting rural economies through increased demand for goods, which in turn needs more labour, which helps create jobs in the rural areas of Britain.  

Indirect benefits to the rural economy 

The benefits of agricultural loans extend far beyond improving the farm and also have positive impacts for the wider rural area including: 

Job creation

As mentioned earlier, investment in farm operations generates employment opportunities, not only for farmworkers but also for contractors, machinery specialists, and local service providers. Allowing a variety of people to get a piece of the pie. 

Supply chain growth

As farms become more productive, they help promote growth across the supply chain. Local suppliers, transport businesses, and food processors all stand to gain from the increased demand created by a thriving agricultural sector. 

Rural business stimulation

Through financially stable farms they can help local shops have more produce helping them generate more income, help out local equipment suppliers from purchasing goods for the farm from the increased revenue and help sustain broader rural livelihoods, by encouraging more people to work and live in rural areas.  

Strengthening resilience in rural communities 

Agricultural loans also play a key role in building resilience across rural areas, which is crucial in turbulent times, here is just a few ways this is achieved: 

Weathering uncertainty

From unpredictable weather to market fluctuations, farming is fraught with uncertainty. Access to finance provides a crucial buffer, enabling farmers to manage risks and maintain stability through tough times. Helping you stay flexible even in tough situations. 

Supporting sustainability

Today’s farmers are not only stewards of the land, but also pioneers of sustainability. Agricultural loans can fund renewable energy projects such as solar farms or biogas plants, as well as eco-friendly farming practices. Helping the environment while also creating more jobs centred around sustainability.  

Conclusion 

Agricultural loans are far more than a financial product—they are a powerful catalyst for rural economic vitality. By empowering farmers to invest in their operations, agricultural finance drives job creation, stimulates local businesses, and strengthens the resilience of rural communities across the UK. Helping rural villages stay strong even in the toughest of conditions.  

Discover how our agricultural loans can help strengthen your farm and support your rural community. Contact our team today to learn more. 

The post The role of agricultural loans in supporting rural economies appeared first on Rural Asset Finance.

Diversification can add value to your hard work

You’ve done the hard work growing your raw produce—and then you watch your buyers process it to sell on at a higher price. Ever considered keeping that extra profit for yourself? 

That’s exactly what thousands of farmers are doing through farm diversification—adding value to their produce on the farm, then selling it direct to customers. And support is available to help you do the same. 

After all, why let someone else turn your wheat into flour, your grapes into wine, your potatoes into crisps, your fruit into preserves and juices, your milk into cheese, yoghurt or ice cream—when you can make more money doing it yourself? 

You can then sell your own beef, pork, poultry meat, eggs, fruit and vegetables on your premises with a shop, café or even a restaurant. 

All these agricultural diversification strategies maximise your profits—which is more vital than ever for farmers needing new revenue streams. Good news is, even the biggest projects are achievable with the right help. 

Process your food products on site  

“More and more farms are seeing the benefits of processing food products and retailing them directly, which keeps more profit on the farm,” says Ben Wood, sales director at agri-lending specialists Rural Asset Finance. “Even just washing and packaging your products before sale can add value—but you can do so much more.” 

Rural Asset Finance gives farmers access to funds for a range of added-value farm diversification projects—and has financed some impressive innovations. Its recent projects include the UK’s first batch milking system and it is currently funding a wheat farmer to build their own flour mill. 

“There are so many opportunities to maximise the value of what you produce,” adds Ben. “Consumers are more conscious than ever before of the need to eat healthily but also sustainably—and there’s no better way to do that than buying fresh food and drink that’s produced locally. This is a fantastic market for farmers who can add value to their produce. And it doesn’t just keep more of your profit within the farm itself—it can open up whole new revenue streams.” 

Make the most of the farm shop boom

Smart farmers are following the market to maximise that value. Of the 1,500 farm shops in the UK, a third opened within the last 10 years, attracting thousands of customers wanting to reduce their carbon footprint and generating a huge total annual revenue of £1.4 billion. 

An upsurge of 70% in British wine sales over the past five years has prompted hundreds of farmers into viticulture, including bottling wine on site. Increasing numbers of farmers are now making their own cider to serve a UK population that drinks more of the stuff than any other country on Earth. 

How could your diversification make a difference?

These are all excellent and relatively straightforward ways to add value, but farm diversification doesn’t have to be food-based. Some farmers have been especially inventive—one in south-west England uses the heat from an on-site anaerobic digestion plant to dry and produce straw pellets for sale as cat litter. A wool farmer in the south-east uses lanolin from wool to make toiletries and soaps. 

“You just need an idea!” says Ben. “Farmers are fantastically resourceful people who are brilliant at thinking outside the box. 

“It requires investment, but as we all know, many lenders don’t really understand day-to-day farming. Farmers need specialist finance partners who ‘get’ what your business is about.” 

Find the right financial support 

Rural Asset Finance’s core team grew up on farms and know first-hand the challenges farmers face. “I think our customers appreciate that we speak their language, we know one end of a combine from the other, and that we have lived everyday farm life,” says Ben. 

“Crucially, we understand every farm is different. We listen and work with farmers to get an individual deal that suits them and their cash flow.” 

Rural Asset Finance can help add value by offering fixed-term, fixed-rate finance for machinery, fixed equipment, land and buildings. This can work alongside government grants including the Farming Investment Fund, the Farming Equipment and Technology Fund and the Farming Transformation Fund, which can provide up to £500,000 towards equipment or building projects. 

Take the next step 

“Grants complemented with the right credit agreements make even the largest projects more achievable than ever. And it’s easy to start—there’s never been a better opportunity to make your farm the business you want. Whatever your idea, we’ll listen to it.” 

To find out how to add value to your farm, contact us here or call Ben on 07483 947 877 

The post Why let others profit from your produce? appeared first on Rural Asset Finance.

WHEN you need a new tractor, you don’t want to have to wait for the money. So contractor Harry Long was delighted when Rural Asset Finance approved his JCB Fastrac 4220 tractor finance in just 48 hours!

“I called with my initial enquiry,” he says, “and two days later they told me I could have the money. It was amazing. With other lenders I’ve had to wait three or four weeks for other tractor and machinery finance!”

It means Harry, who with his siblings runs Essex-based Long Brothers Agricultural Contractors, has taken delivery of a used JCB Fastrac much quicker than he expected.

“We hire tractors with drivers and contract straw-chasers but have expanded much quicker than anticipated, so wanted an additional machine in a hurry,” he says. “I’ve previously bought through a broker but decided to go for a direct lender. I expected it to be quicker but not this quick!”

Harry’s tractor dealer recommended Rural Asset Finance for tractor finance – but it wasn’t just the speed that impressed him. “At RAF they’ve all got direct farming experience, so they really know what you’re talking about, why you need specific machines and what they do. “I spoke to Head of Sales, Ben Wood and he really knows his tractors! Plus, he already knew the dealer! It was great to speak to someone who really understands your business.”

Harry’s agricultural hire purchase agreement means that following an initial deposit he will pay a fixed monthly amount for three years and then have an option to pay a small balance to buy outright. “This will make a huge difference to our business. It’s been so quick, so easy, so straightforward, and the people at Rural Asset Finance are so friendly. I’ll definitely be using them again for other agricultural machinery finance!”

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Our Head of Sales, Ben, was approached earlier in the year to discuss a secured business loan with the purpose of funding a new business opportunity to compliment the large-scale arable farming operation and already live rental and diversification portfolio ran by our client.

The new site consisted of a stunning large country house with indoor swimming pool, 136 acres of manicured parkland and substantial equestrian facilities. the business opportunities for this new project were clearly plentiful after a standard site visit conducted from Ben, as we do on any secured business loan transaction, our client provided financials and forecasts supportive of a funding facility of this size which provided new multiple income streams from the new site, these consisted of a wedding venue with accommodation, camping and glamping, fisheries and equestrian holidays, to name a few..

We worked with our client and found a secured business loan payment profile which suited the clients cashflow and we quickly provided an approved credit decision from our in house underwriters and passed over to our legal team to complete the transaction for our client.

This is one of many projects of which we have been able to provide our own funding for, this was an amount of £1.5m on a 30 year structure, we fixed this repayment profile for 5 years giving our client a fixed monthly payments so they were assured this was not going to change, giving them peace of mind for the 5 years, this gave them the ability to focus on running their business without having to monitor repayments changing each month.

if you have an idea, dream or an opportunity on the horizon, we encourage you to pick up the phone and give our friendly agricultural finance specialist team a call to discuss these, it may just be easier than you thought to get things started.

The post Secured Business Loan, Completed! appeared first on Rural Asset Finance.

The government’s new Consumer Duty will protect borrowers with a number of measures that ensure all lenders act in good faith and in their customers’ best interests. In our latest column for Farmers Weekly, our CEO Matthew Smart welcomes this move – but points out that responsible lenders are already there.

Farmers, like everyone else, are feeling the squeeze.

High inflation and spiralling interest rates are now making a difficult last few years even more challenging – and forcing many farmers to review and reorder their finances in order to protect their businesses and safeguard their futures.

Reviewing the array of different financial products, costs and suitability are essential parts of this process.

To help and support this safeguarding of retail customers through the whole journey of the finance process, and to give borrowers wider and more informed choices before they commit, is the government’s new Consumer Duty.

This is a new standard from the Financial Conduct Authority which sets higher and clearer standards of consumer protection across financial services and actively requires banks and finance companies to put their customers first.

The new Consumer Duty regime affecting all UK lenders with retail customers, which came into force on 31st July, will eventually supersede the 1974 Consumer Credit Act which, at nearly 50 years old, is no longer really fit for purpose.

Its language is full of impenetrable legalese, it doesn’t regulate newer forms of lending such as Buy Now Pay Later and it doesn’t directly cover the digital technologies which now form part of everyday life when taking out credit.

We welcome new FCA protection for borrowers

Consumer Duty is a definite and, we believe, welcome shift to the side of the borrower.

The FCA’s new Principle 12 states “Firms must act to deliver good outcomes for retail customers”. It demands transparency and support, stipulating that lenders should:

• Take all reasonable steps to avoid causing foreseeable harm to customers.
• Take all reasonable steps to enable customers to pursue their financial objectives.
• Act in good faith.

Specifically, it means consumers should receive communications they can understand and products and services that meet their needs and offer fair value.

The new ruling makes lenders give clear information that enables borrowers to make a measured, informed decision without pressure, as well as support when they need it. And it obliges credit firms to focus on consumers’ real and diverse needs, including those in vulnerable circumstances, at every stage of the borrowing process and every time they speak to their lender.

All this is long overdue and excellent news for borrowers and will mean significant changes for many banks and financial institutions as they work to adapt to the new regulations.

Established lenders have to change their very culture to comply, while also introducing new standards and processes to report responsibility for their sales forces, broker introducers and dealer point-of-sale finance.

There is particular focus on intermediary Commission Disclosure and so called “Closed Conditional Selling practices” whereby dealerships and estate agents effectively strongarm customers into using in-house financing products as a condition of the product purchase by an employee or agent working within that sales outlet.

This morally questionable practice prevents the customer from shopping around and comparing different products, rates and terms for financing the purchase, and raises serious ethical and consumer rights concerns for many. Addressing these practices and the rules which allow them to happen is long overdue.

The better news is that some more agile independent lenders are already there being customer-centric in their culture and already have customer-first service at their core and are already committed to a transparent, fair, positive outcome for all their customers.

The new regulations and reporting will confirm to such lenders they have always prioritised customer service and positive borrower outcomes and little change in culture is therefore required.

Those who are already communicating clearly, honestly and transparently, giving their customers support to make their own informed choices without pressure, don’t need to change much to make their clients’ whole customer journey even better.

The post Responsible lenders already have a duty of care appeared first on Rural Asset Finance.

This herd of cattle, and one water buffalo, were particularly happy when they over heard us speaking with their owner about funding options for new straw and livestock buildings to erect on the farm, we arrange funding in the form of both long term business loans and HP agreements for agricultural buildings for complete flexibility, we would love to come to your farm and discuss funding options for any growth and or expansion plans in the pipeline – helping you to grow for a sustainable future

The post Happy Cows, Happy Farm appeared first on Rural Asset Finance.

Our customers out spinach harvesting over the bank holiday weekend with all Rural Asset Finance funding equipment, 3 new trailers required to keep up with the spinach harvester, the produce will more than likely now be in homes across the UK after landing in supermarkets within 24 hours after harvesting. No bank holidays for our fantastic British farmers who stop at nothing to ensure the country has the finest British produce available to them.

click the below link to view the brilliant footage!

Spinach Harvesting Video – RAF Supplied Link

The post Farm to Supermarket in 24 hours appeared first on Rural Asset Finance.

Scheme will help farmers ‘test out’ viability

FARMERS looking to diversify into campsites could benefit from a plan to permanently extend Permitted Development Rights (PDR) for pitching tents in England.

The government has launched a consultation process to consider whether PDR – a process whereby farmers can operate temporary unlimited-pitch campsites without planning permission – could be extended from its current limit of 28 days a year to 60.

Not only would this make the seasonal diversification more worth farmers’ while – it would also help them to gauge the market potential and decide whether to invest in a full-time site as a permanent diversification and alternative source of income to secure their future.

At Rural Asset Finance, we can help fund such diversifications and Dan Yates, founder of Europe’s largest outdoor accommodation provider Pitchup.com, described the consultation as “great news”. He added: “Extending PDR had a huge benefit for farmers, landowners, and other rural businesses such as pubs.

“Now, during the cost of living crisis and at a time when farmers are reeling over the winding-down of Basic Payments, unprecedented input costs and a labour crisis, extending PDR permanently could provide a lifeline for them.”

But campsites are not the only diversification that could be boosted by extended PDR rights. The government’s consultation, which proposes changes to the Town And Country Planning Act 2015, also covers installation of solar equipment, various aspects of local authority development and the temporary use of land or buildings for film-making – all of which we can help you fund.

Responses to the consultation, headed by the Department for Levelling Up, Housing And Communities should be submitted by April 25 2023.

The post An intense boost for camping diversification appeared first on Rural Asset Finance.

The first monday of every month, Ben will be at Cheffins Machinery Sales, not only to speak with customers present and new, but to keep his pulse on the machinery values within in industry, catch up with Ben about getting pre approved funds ready, so that you can bid with confidence to secure that next machine!

The post Hammer Time! appeared first on Rural Asset Finance.

Why farmers need a consistent, industry-wide method to measure sustainability in order to plan their future and safeguard their businesses.  Read all about it in our new Farmer’s Weekly column!

By Matthew Smart, founder, Rural Asset Finance

Everyone in our industry knows how committed farmers are to protecting the environment and their willingness to invest in sustainable projects. That instinct for sustainability is inherited through generations.

Yet every week, it seems, more tell us how confused they are by the criteria they must meet for government funding and external finance.

The UK Climate Change Committee has previously pledged that 40% of the UK’s net-zero target will be met through a combination of tree planting and other ‘nature-based solutions’ – but there is currently no comparable standard or verifiable measure of carbon sequestration.

This makes it impossible for farmers to meet these goals – they cannot compare their own farms with their peers and genuine lenders actively supporting this evolution cannot be sure we are backing the best projects.

The government has unfortunately contributed to this confusion.

As all farmers know, although more detail has emerged in the past few days the ELM schemes still lack clarification and without that certainty, farmers have little idea what funding will be available to help them finance new projects and set affordable repayment schemes for new loans with their existing lenders, or in seeking further funding from private lenders such as ourselves.

However, we saw a chink of light last week when former Tory energy minister Chris Skidmore, who had been commissioned by then D-BEIS secretary Jacob Rees Mogg to review the UK’s net-zero progress, shocked his own government by detailing a list of 130 things they could and should be doing better.

Time to grant farmers’ wishes

One of his most urgent recommendations was to grant farmers’ wishes and create a consistent, standardised system whereby they can measure emissions and carbon sequestration – and we at Rural Asset Finance fully support this.

A recent NFU report highlighted a lack of confidence by farmers in using GHG calculators because of the sheer number of available methods, the time taken to input data, the suitability to their farm system and a lack of clarity in the results.

How do you know if you’re carbon neutral, carbon negative, carbon positive, what parameters do you use – and how can you tell if it’s worth your investment?

These are vital questions. Thousands of farmers use government grants as a foundation to then attract private loans and other additional investment – and for many the answers will shape the whole future of their business, as the trade of carbon credits and offsetting with wider industry gains momentum with significant financial gains.

They need to know their most efficient and lucrative direction of travel and for many that will mean a choice between traditional food production, countryside management, renewable energy production or a combination of all three.

So the stakes are high. A comparable UK standard as recommended by the review will aid targeted investment and finance to drive progress.

This would lead to better finance rates

It would also, says Mr Skidmore, enable the government to establish mandatory standardised ecolabelling on food by 2025 and a national regulator for carbon credits and offsets by next year, which in turn would accelerate the public and the markets rewarding businesses proved to have a lower carbon footprint.

And part of this reward would be preferential financing terms from genuine lenders wanting this exposure.

Mr Skidmore’s review underlines that sustainability is profitable for farmers, forecasting that enhanced productivity will save agri-businesses £170million a year by 2035.

But he also rightly understands this will only happen if farmers are given a consistent yardstick to measure their progress.

He has demanded the government finalise its own ELM payments criteria by this summer, but adds standardised measurement would also open up farmers’ opportunities to access other money for sustainability projects.

Indeed, his review actively encourages this, recommending that the government’s ELM schemes “do not crowd out private finance”.

Our lending reflects the UN’s sustainability goals

It’s essential for the planet and all our futures that preferential funding goes to farming projects which meet sustainability criteria  – and at Rural Asset Finance, we are proud that our own fund investors stipulate the environmental “green” projects we fund must align with the United Nations’ 17 sustainable development goals.

Notably our lending in this area – and that of the funds we work for – reflect the UN’s targets around:

• Zero hunger –doubling agricultural productivity of small-scale food producers and creating sustainable food production systems and resilient agricultural practices
• Affordable and clean energy – increasing substantially the share of renewable energy in the global energy mix
• Industry, innovation and infrastructure – upgrading infrastructure and retrofitting industries to make them sustainable
• Responsible consumption and production – reducing food waste.

Our wholesale funders are putting hundreds of millions of new funds under our management to deploy during 2023/24 in transactions that meet goals from that list – and we are dedicated to funding projects that help make this vision a reality.

But the challenge remains: to meet these criteria for funding, UK farmers must figure out where they sit on a UK standard spectrum and exactly how “net green” their businesses are compared to their peers.

For this we need government action, to follow Mr Skidmore’s recommendations by clarifying a standard measure, and as soon as possible.

When we as a lender have this information, farmers can decide which direction they need to travel with targeted funding at preferential terms available – and help lead the green revolution.

This article also forms our new column in Farmers’ Weekly, which appeared in the print and online editions of the magazine on February 3, 2023. 

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