17 January 2019
Traditionally, agricultural business have assumed that pretty much the only source of finance to fund expansion plans, succession, diversification, land purchases, or any other business requirement, is the bank. Although banks can be a great source of finance and for the agricultural community often the first point of contact, there are some viable and credible alternatives to be explored.
Being fully aware of your financing options is the first step and before plunging into a conventional loan, it is worth exploring all the possible options.
The government-owned, independently–run ‘British Business Bank’ has launched its own quick and easy finance hub to help agriculture businesses identify suitable finance options. The finance hub requires answers to six simple questions:
- What sector your business is in;
- Where your business is based;
- The main reason for seeking finance;
- The amount of finance you are looking for;
- The profitability of your business (there are one of three options to select);
- The business’s assets (select which asset you have).
Once you have completed the six questions, the finance options which could be right for your business are shown, along with an explanation of what these are and how they work in plain English. The website then points to trusted providers of these finance options.
With Brexit looming and the phasing out of the Basic Payment Scheme, it is imperative that farmers think about diversification in some shape or form. Using the finance hub is a useful tool to establish what financing options are available to fund such a strategy.
The finance hub can be found here.