New technology and machinery that could transform farming

Advancements in technology mean that we could soon see smart farming dominating the agricultural industry.

Farmers are likely to become increasingly reliant on farm machinery finance to help them gain the new machinery and equipment they require to keep pace with technology and stay competitive.

Just a handful of the high-tech agricultural equipment set to automate farmers’ jobs include:

Sensors– Sensors can be used on the land or in machinery and equipment to gather and share information and data. Sensors can be placed in fields to gather data about the condition of the soil, or in machinery to track information about yield or condition of machinery. This information can then be accessed by the farmer from anywhere, allowing them to make the relevant changes necessary to optimise crop growth.

Drones– Drones are already being used by farmers in the US for a variety of tasks including monitoring crops and spraying chemicals.

Driverless tractors– Automated, driverless tractors can operate all day and all night, to get the job done quicker and more efficiently. Future farmers may also be able to link their tractors to sensors and drones, giving them access useful information about the field that they’re working.

Robot pickers– Picking crops is a labour-intensive task which can be completed quicker and more efficiently with the help of robots that work 24/7. Using robot pickers would also significantly reduce labour expenses.

To find avoid getting left behind, find out more about our farm machinery finance options by giving our team a call on 0113 288 3277.

Business diversification ideas for farmers

If you’re ready to join the 62% of UK’s farmers that have diversified from traditional farming, we’ve come up with a few alternative income ideas to inspire you.

With farmers in the UK facing many challenges, diversifying the products and services that they offer is a sensible way of branching out and boosting income.

Many farmers are making better use of the land and buildings that they own, adding new arms to their business that are outside of traditional farming.

Some of the most popular business types that farmers are diversifying into include:

  • Camping and caravan sites.
  • Bed and breakfast.
  • Renewable energy.
  • Petting farm.
  • Cattery or kennels.
  • Farm shop and café.
  • Toddler group or kid’s parties.
  • Riding lessons.
  • Alternative crops/farming.
  • Craft workshops.

According to government figures, UK farms that have diversified bring in an average of £10,400 extra revenue per farm. With these kinds of figures, can you afford not to diversify?

A good place to start, is to assess your existing business and identify any physical resources or skills that you could be making better use of.

Funding for diversification

If you require help funding your diversification project, it’s best to plan and develop your ideas before applying for agricultural finance.

Carrying out thorough research and creating a detailed business plan can help to reassure lenders and get them onboard with your vision.

At Richmond Asset Finance we have over 10 years’ experience helping farmers to gain the agricultural financethey need to grow their businesses. Get in touch to discuss your project in more detail by calling us on 0113 288 3277 to find out if we can help.

3 key things to consider when applying for a farm loan

Thinking about applying for a farm loan? Check that you have prepared this key information first.

At Richmond Asset Finance we aim to make applying for a farm loan as simple, quick and pain-free as possible.

Our farm loans have helped numerous farmers to gain the agricultural assets they need to grow and thrive.

Before applying for a farm loan it’s helpful if you can prepare key information about your business and its plans, to increase your chances of securing finance and speed up the process.

The three key things that lenders will look at when deciding whether to grant finance are:

Business plan– Being prepared is key to securing a farm loan. Having a business plan and financial projections all planned out can help to reassure lenders that you’ve thought things through and get them onboard with your vision.

Creditworthiness– Before applying for finance you should find out how your credit rating is looking. Funders are more likely to invest in businesses that they deem to be less risky, but that’s not to say there won’t still be a financing option for you if your credit rating isn’t great, it’s just best to know where you stand from the start.

Financial information– When applying for a farm loan you will be required to give evidence of your current financial situation. This may include copies of your bank statements, balance sheet, cash flow statement, and details about existing assets.

At Richmond Asset Finance we have over 10 years’ experience helping farmers to successfully secure farm loansto grow their business. We can advise you on everything you need to make your farm loan application successful. Just give our team of experts a call on 0113 288 3277 and we’ll be happy to help.

Looking for Alternative Tractor Finance? Here’s How Farm Finance Can Help

Growing a farm business much like any other business is no easy task if a business lacks the finance to fund growth. For these farms it is almost inevitable that financial help will be required at some point to grow the business.

Tractors are a critical component in the day to day running of a farm and one of its most important pieces of machinery. An unreliable or outdated tractor can impact on productivity and efficiency as well as cost the business money much as the opposite is true if you are purchasing a good, reliable up to date model.

A tractor can cost in excess of £250,000 which is a substantial sum for any business and even standard models can cost in the region of £80,000. So, like any investment decision, buying a tractor will require a careful assessment of the improvements it is likely to bring to the business and how it will impact on the bottom line.

Tractor purchases can be made in the form of lease or HP arrangements that provide farm business with a more flexible way to purchase machinery they need. Even if the business has sufficient finance to purchase these machines outright it, asset finance can still offer flexibility and help protect funds for a rainy day.

Why Is The Machine Finance Market Growing?

Machines are critical to growth in the manufacturing sector but they are often expensive and can eat into business profits without some form of financial help.

Traditionally business owners turn to the bank to provide straightforward business loans to help if there is insufficient cash in the business to purchase machines. Even if there is enough cash to buy a machine, a loan can be a more sensible way to buy equipment particularly if there is risk attached in making large investments as there often is in business. However, business loans from banks also come at a cost and interest rates can be high.

Having multiple loans can also leave a business vulnerable in a downturn and restrict any cash flow available to grow the business. Machine finance is growing in popularity because it unlocks funding when you need it.

So if your business requires a new machine that will cut down the amount of manual labour required to get jobs done such as a CNC machine, machine finance can help you acquire that machinery at a minimum upfront cost.

This means you get the benefit of improved efficiency and profitability while spreading the cost. It can also be tax efficient now that the government has increased the annual investment allowance. So it comes as no surprise that the machine finance sector has grown 9% year on year.

Machine Finance Sector Up 9%

Any thoughts of the manufacturing sector being hit by the uncertainty around Britain leaving the EU Certainly hasn’t been felt in the machinery finance sector where growth has hit 9% compared to the previous year.

Analysts say the UK asset finance market as a whole look set for a record period of growth in 2019 on the back of a broadly stable 2018. Last year saw a mixed pattern of growth in some sectors and declines in others. IT asset finance for example saw a fall of 32% while other sectors such as machinery and business equipment finances saw increases, the latter seeing 8% growth in the same period.

Machinery finance may well see further year on year growth in 2019 if manufacturing receives a boost and more business owners take advantage of the temporary tax benefits that will come as a result of taking advantage of new Annual Investment Allowance limits.

Machine finance can be particularly useful for investing factory machinery such as CNC machines, which can be expensive to purchase outright. Machine finance provides a way of investing in machinery without having to risk huge amounts of money which can be better used in expanding business operations, research end development.

Farmers – Are You Exploiting This Tax Allowance?

It may not be all good news for farmers this year but there is one particular piece of news that every farmer should be aware of and that relates to an opportunity to take advantage of machine purchases with the help of the government.

Farm machinery is often a major purchase with tractors alone costing in excess of £100,000 so if these savings can be offset it has to be good news. Fortunately, the government stepped in to help farmers with a change to the Annual Investment Allowance that will go a long way towards helping farm businesses make some big investments in farm machinery.

The fact that the move isn’t permanent should alert farmers to take advantage before 2021. The AIA threshold was £200,000 in 2018 and this has temporarily risen to £1million for the next 2 years.

With a lot of uncertainty at present and for the future of some farms in the UK this allowance could make a difference. Specialist finance could help ease costs further for farm businesses and enable more investment to improve efficiency and explore new opportunities for farm business development in the future.

If you would like to find out more about farm finance contact one of our advisors today who will be able to help.

How To Avoid The Business Funding Post Code Lottery

According to recent reports, where a small business is located can have a big impact on how likely it will receive funding. While some areas offer excellent prospects for funding others are virtually feeding of scraps according to statistics.

Figures from 2016 show that businesses that benefitted from the Bank Referral Scheme totalled only 900 out of the 19,000 that had been referred after failing to secure loans from high street lenders. Looking deeper into the stats just 75 of these companies was located in in the North West.

Looking at more recent figures from UK Finance, things haven’t changed much when it comes to loan approvals by UK region. All regions saw a year on year fall in loan approvals in the final quarter of 2017 apart from Wales which saw a 55% increase compared to 7.6% decline for England.

The statistics show banks still a have a long way to go before they have sufficient trust in lending to small businesses throughout the UK with the exception of Wales.

To get around this problem, businesses should consider alternative forms of business finance to support ambitious growth plans such as asset financing.

Are You Looking At The Right Asset Finance?

According to the latest figures release by the FLA new asset finance business grew 9% in October 2018 compared the previous year. Many businesses will be benefiting from the boost this will contribute towards business development and growth but if you are considering joining the growing number of businesses who benefit from asset finance it is important to ensure you select the right asset finance for your business.

Most business owners opt for asset finance when much like taking on any other type of business loan they require funding. For example, they may wish to lease an asset if they want to spread the cost over its lifetime. This avoids the pitfalls of rapid depreciation of assets.

Asset finance however comes in many forms including finance lease, hire purchase and it is important to compare these against other products such as commercial loans. While the benefits of asset finance are often clear it is worth consulting a qualified expert to discuss what is best for the business both in the short and long term.

You will find a wealth of information on the different options available on our website or you can give us a call and speak to one of our advisors to find out how asset finance can work for your business.

Asset Finance New Business Rises 9%

According to the most recent figures released by Finance & Leasing Association (FLA) new business in the asset finance sector increased by 9% year on year in the month of October. This indicates that Brexit uncertainty hasn’t put off firms looking to use asset finance to grow and develop their businesses.

With asset finance covering several sectors, some areas have shown even more spectacular growth than the overall figure suggests. Machinery finance for example showed growth of 16% compared to October 2017 while business equipment finance was up 29% which is nearly one third up. The commercial vehicle sector also saw an increase of 23%.

These figures represent a strong end to the 2018 which began with similarly positive increases in new business in the construction and agricultural asset finance sectors. The asset finance sector is on course for another record-breaking year which will come as welcome news as bank lending to business continues to show a decline in loan approvals across much of the UK.

Despite the good overall news, technology equipment finance saw a fall in new business which pushed the overall figure down. It will be interesting to see if growth in new asset finance business is maintained in 2019.

How AIA Can Help You Finance Your Equipment

As we start the new year many of us will have plans to expand our business or perhaps look at new products and services. This may not be possible, however, without the extra costs involved in purchasing new equipment, new software and so on.

This extra cost burden can be off putting but if you take advantage of the Annual Investment Allowance (AIA) did you know that you can offset your investment in equipment and technology against tax?

Better still you can offset 100% of the investment against your taxable business income so not only do you get to improve your business operation and innovate, you can also reduce your tax burden at the same time. The allowance was also recently increased from £200k to £1million.

If you are planning to take advantage of the AIA this year you can use asset finance to spread the cost rather than invest all the cash in your business up front. This multiplies the benefit to your business.

The AIA was originally introduced in 2008 and the recent increase from £200k to £1million is designed to help stimulate investment in business at a time when it will be needed more than ever in the UK.

Why use an Asset Finance Company for Funding?

The asset finance market continues to grow as business owners wake up to the benefits this form of lending. So why should your business consider asset-based finance and what benefits can it offer over traditional forms of lending?

One of the major benefits of asset finance is that it not only provides finance for a business, it also helps fund the equipment needed to expand or improve productivity.

One of the major hurdles for owners of startups and small businesses is having enough finance to scale up their operations. Equipment is generally expensive and if this equipment is purchased it often takes vital funds away from other areas of the business.

Spreading the cost of this equipment using asset finance is business friendly because it allows assets to be used to generate income freeing up cash to be used in other areas of business development.

Asset finance is provided by specialist asset finance companies and the process is often fast and straightforward. While banks will be demanding in the amount of information, they need due to the risks involved with traditional lending, the risks with asset finance are lower reducing the time it takes to put the funds in place.

To summarise, asset finance companies offer an attractive alternative to traditional lending by using assets to free up and maintain cashflow allowing business owners to expand and improve their operations.

Is Your Start-up Prepared for A Loan?

Starting a business from scratch is tough and the odds can be stacked against you if you don’t have enough investment capital to plough into the business at an early stage. Taking a loan, however, is also a major step which is why we have put together this guide to see if your startup is ready for a loan.

Do you have a business plan ready?
Having a business plan written down is a crucial step towards getting business finance. Lenders are going to want to see that you are serious about your business and a business plan indicates to them that you have took the time to develop your business and you have a clear pathway towards growing it.

Can you prove there is demand for your product or service?
Having a business idea and putting it into a plan is one thing but testing it out in the real market place is quite another. It will strengthen your case significantly if you can provide some data on real sales made and that your business idea works.

Finally, do you know what you need a loan for?
Applying for a business loan without any idea what it is for will almost certainly end in a failed application. Finance providers will be looking for some assurance over what the money will be used for.

Guide to the Benefits of Construction Finance

The construction industry is a varied and complex business particularly on large development projects where there will be a number of parties involved. From developers to builders and investors each will have a role to play before a project reaches completion and everyone can benefit from the return on investment. With this in mind here are some of the key considerations when seeking construction finance and how specialist finance for the sector can help.

Construction finance can save time
Getting a development project off the ground often requires investors to finance 75% of the development cost. This can delay projects while investors are sought to meet this cost. Construction finance brokers can help secure the best rates and find suitable lenders.

Construction finance can help meet upfront payments
Construction companies will normally demand upfront payments before starting work on a project. This means developers will need the funds to pay them. These funds will come from investors but often to make investments more attractive, payments are staged. Construction finance can help with construction costs and plug any gaps in funding.

Construction companies can overcome cashflow challenges
The main challenges for construction companies are paying for raw materials and their workers. If a project is late being delivered and payment terms include a lump sum payment on completion this can mean delays to the final payment putting the business at risk. Construction finance can help reduce this risk and cover upfront costs.

Farm and Agricultural Finance

With the uncertainties surrounding Brexit Farming in the UK faces an equally uncertain future depending on any deal eventually reached with the EU. Whichever way the deal goes the farming industry will almost certainly lose out on EU subsidies and this will make funding an even more important consideration in the future. So how can specialist agricultural finance help?

Agricultural finance plugs the funding gap
Many traditional sources of farm finance disappeared following the financial crisis of 2008 putting farm businesses under increased pressure to find alternatives. Agricultural finance is an attractive alternative aimed specifically at the industry.

Agricultural finance can be secured against real assets
Farming and agricultural businesses will often possess more assets than other business types making them ideal for asset finance. Assets such as land and property gives farmers an opportunity to use these assets to save or invest in their businesses.

Agricultural finance loans offer flexibility
Today farmers often need to diversify to survive. Areas such as renewable energy can provide some potentially lucrative opportunities to generate extra revenue. Agricultural finance enables farmers to invest in these types of projects and minimise risks at the same time.
If you would like to find out more about agricultural finance contact us today to find out more.

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