Category: Loans

Yorkshire Machinery Finance for Farms

From tractors, headers or balers, if it’s part of a working farm Richmond Asset Finance can finance it! At Richmond Asset Finance we have access to an experienced panel of lenders so we can bring you only the best finance options for your farm machinery and business.

Agriculture is very diverse and we also understand that that some farmers have seasonal income, so we can tailor seasonal loan structures for certain applicants if the situation calls for it.

We also understand that a 1998 tractor might still be in good working condition, so older farm machinery can be financed from both private sellers and dealers. Simply ask us for more details.

We can offer agriculture finance loans for the following vehicles and equipment:

  • Tractors
  • Harvesters
  • Spraying Equipment
  • Spreaders
  • Seeders
  • Offset Disc
  • Balers
  • Irrigation
  • Telehandlers

Have farm equipment or machinery that’s not on the list? Call us and we’ll be happy to help: 0113 288 3277

Need a new tractor?

Rural Finance from Richmond Asset Finance can help your purchase what you need.

Richmond Asset Finance are one of the north west’s leading rural finance and agricultural brokers.

We are one of the biggest agricultural, commercial and industrial finance brokerage company’s operating throughout England, specifically the North West.

What makes Rural Finance different?

Here at Richmond Asset Finance we like to visit our customers, so we have a clear understanding of their requirements. Once we have a clear understanding of your needs and financial situation, we are in a better position to provide you with products that suit your circumstances. Richmond Asset Finance has brokers based around the North West, ensuring we always have someone to help you. Take advantage of our experience and give us a call on 0113 288 3277.

Finance Options

Typical Finance Types, uses and descriptions

1. Farm Finance, Rural Finance

An all embracing term we use to describe all types of farm and agricultural finance we offer in the rural and country business sectors and which can also be described as Agricultural Finance, Equestrian Finance, Farm Finance, Land Finance and Horticultural Finance. Finance can be provided for holiday complexes, caravan parks, caravan sites, properties with agricultural restrictions, land, buildings, working farms, non-working farms, nurseries, garden centres, smallholdings, estates, fisheries, farm shops and generally all types of rural type situations.

2. Agricultural Loan, Loan for Agriculture, Loans for Agriculture

More commonly described as an Agricultural Mortgage, Mortgage for Agriculture, Agricultural Re-mortgage or Re-mortgage for Agriculture being a loan secured by a first charge over property in UK, England. In some cases a loan may be secured by way of a second charge over this type of property.

3. Bridging Loan, Bridging Finance

This is a short-term arrangement whereby a loan is secured either by way of a first charge or second charge on property in England, Wales, Scotland or Northern Ireland. Usually, but not always, interest is rolled up or added to the account so that all the money is repaid by the end of the term, meaning that no monthly payments are made.

Rural Finance available from Richmond Asset Finance

Painless finance made possible with your own account manager

We understand that your time is valuable, so your dedicated account manager will work their hardest to undertake as much of the process as possible.

Richmond Asset Finance are a major funder of Dairy and Beef breeding cattle in the North West and surrounding areas. If you are replacing or expanding your dairy or beef herd we have funding available through Hire purchase and loans up to 48 months with no additional security required other than the livestock being financed.

Richmond Asset Finance are able to fund your cattle through:

  • Livestock markets
  • Farm to farm
  • Livestock brokers
  • Farm sales

We can provide effective farm finance strategies for various sized projects. With a general lack of lending in the marketplace, we offer a solution for farmers to source their funding needs.

Bridging Loans when selling a house – what are the pros and cons?

Pros

  • You can buy your new property right away: You don’t have to wait to get a loan.
  • It gives you time to get a better price on your property: You can avoid the stress of having to sell your property quickly. By taking the time, you may be able to get a better price for your property.
  • Interest-only repayments which are capitalised on your peak debt: Your bridging loan repayments are usually ‘frozen’ during the bridging term until you sell your existing home. You’ll only have to keep paying your current mortgage and not have to worry about managing two home loans.
  • Banks charge standard interest rates: In the past, banks charged a higher interest rate for bridging loans but now there are some lenders that charge standard variable interest rates.
  • The same fees and charges as a standard home loan: Application fees are the same and you don’t have to worry about break costs or discharge fees for paying the loan off quickly. Keep in mind that most lenders won’t generally approve a bridging loan if you’re likely to sell the property in less than 3 months.
  • You can make unlimited P&I repayments: To reduce your interest bill, you can actually choose to make as many repayments on the bridging loan until you sell your property.
  • Avoid the costs of renting and moving twice: Sometimes renting and having to pay for the costs of moving twice may be a better option than getting a bridging loan. It’s important to speak to a qualified mortgage broker so they can help you do the sums to find out which option is better for your situation.

Cons

  • Interest is compounded monthly: Although the interest is capitalised on top of the peak debt, the longer it takes to sell your property, the more your loan will accrue interest. Interest is compounded on a monthly basis.
  • You need to pay for two valuations: This will be a valuation of both your existing property and the new purchase.
  • Higher interest rate if you don’t sell the property in time: If you don’t sell your existing home within the bridging period, a lot of lenders will charge a higher interest rate. Many will also require you to start making principal and interest repayments on the peak debt in order to service both loans. This can cause financial stress.
  • No redraw facility: If you choose to make repayments during the bridging term but need to redraw for any reason, you won’t be able to do so.
  • Normal early termination fees will apply if switching lenders: If your current lender doesn’t offer a bridging loan product, you’ll have to go with another lender that will likely insist on taking on the entire debt (your existing mortgage plus the bridging loan). Because you’re switching lenders, you may be liable for early termination fees and break costs particularly if you’re switching during a fixed interest period.

Farmers cannot be the forgotten heroes of the coronavirus pandemic

The coronavirus pandemic has amplified the uncertainty and fragility of the conditions within which farmers operate.

The coronavirus pandemic has caused us all to become acutely aware of our own mental health, as a “new normal” has emerged. In the UK, there is sharp focus on the mental health of keyworkers supporting the nation in an array of fields such as the NHS, social care and education, but one industry’s contribution that should not be overlooked is the farming and agricultural workforce.

Seasonal labour

Concerns around levels of seasonal labour also predates the pandemic, and concerns have been raised by those within the industry throughout the Brexit debate. UK seasonal farming has been chronically understaffed since the UK voted to Leave and the value of the pound fell. As has been widely documented, an estimated 70,000 seasonal workers are required throughout the year, and around 90 percent of those are from outside the UK. But with restrictions on travel due to coronavirus, farmers in the agricultural, horticultural and dairy industries in particular are reporting severe labour issues.

The Government recently launched its “Pick for Britain” campaign to mobilise a land army of British pickers to help fill farm vacancies. This did not come without concerns from farmers, as many seasonal workers are normally returnees, arriving at the start of the season fully trained in the necessary skills and machinery to hit the ground running. By stark contrast, training new UK recruits can be costly and initially result in lower productivity. Furthermore, recent reports note that, following tens of thousands of initial sign-ups, just 112 people were hired by UK farmers last week. Many applicants cited that they could not commit to the full length of the contract, farms were too far away, or they had caring responsibilities and therefore could not work long hours.

Change in consumer demand 

Changes in consumer demand during the coronavirus pandemic, with a move from out-of-home eating to more meals eaten at home – an estimated 500 million more per week – has resulted in some farmers losing their market overnight. This is down to difficulties in redirecting food produce once destined to the foodservice sector, as it been noted that consumers often wont replicate the meals that they would have had out of home, and there are issues with repackaging foods for retail. The impact on dairy farmers has been widely documented with videos of many having to pour away milk – an estimated 1m litres worth – along with the effects on the meat and horticulture sectors. Further to this, farmers have been faced with an increase in the theft of animals by criminals seeking to “cash in” on public concerns about food shortages.

To compound the challenges, the instruction by government to close B&B accommodation and farm cafés amongst other restrictions, and the subsequent loss in public demand, has also impacted farmers who have diversified their sources of income. These diverse streams of income are often vital to small farms’ survival, as many do not make a profit from their farming activity alone, so the financial consequences of this collapse will undoubtedly impact many in the sector.

Over Half a Million UK Companies in Significant Financial Distress

According to redflagalert, a report has suggested thats:

  • 509,000 UK companies are in significant financial distress—the highest number ever measured.
  • The coronavirus lockdown has seen the largest quarterly increase in the number of businesses in significant distress since the end of 2017, growing by 15,000 companies.
  •  This figure is expected to increase throughout Q2 as COVID-19 restrictions continue.
  • The number of critically distressed businesses increased by 10% in the last quarter alone.

During Q1 2020, the number of UK companies experiencing significant financial distress exceeded the half a million mark for the first time since our research began.

Latest figures show a 3% quarterly increase in the number of companies that are unable to meet their debts—that’s 15,000 businesses, representing the largest increase since the end of 2017.

The leading cause of this is the coronavirus restrictions and our data shows that SMEs have been worst hit, representing over 99% of all businesses in distress.

Companies with less than 250 employees are particularly vulnerable at this time as many have struggled to access government support schemes.

Even more concerning is that our data shows a 10% jump in the number of businesses in critical distress in the last quarter—this is usually a precursor to insolvency.

A recent survey from redflaghalert has suggest that there has been a significant increase in businesses experiencing critical distress; 2,289 companies are now in this category. Between Q4 2019 and Q1 2020, the increases in certain sectors have been dramatic:

  • Bars and restaurants: +37%
  • Real estate and property: +21%
  • Construction: +11%
  • Retail: +8%
  • Manufacturing: +8%

The sectors that have been hardest hit by significant financial distress in the last quarter are:

  • Real estate and property: +6%
  • Hotels and accommodation: +5%
  • Construction: +4%
  • Health and education: +4%

Since 2014, several sectors have had huge increases in the number of businesses in distress. These sectors include:

  • Utilities: +132%
  • Real estate and property services: +104%
  • Sport and health clubs: +86%

Year-on-year, all but one (printing and packaging) of the 22 sectors monitored by Red Flag Alert have seen increases in the number of companies in significant distress over the past 12 months, with the worst affected being:

  • Real estate and property: +17%
  • Sport and health: +8%
  • Food and beverage: +7%

Many businesses are currently not failing immediately because the government support schemes. The suspension of court action has stopped many businesses from also going under. However, this will only be a short-term solution and once things start to normalise again the figures may increase.

Typically, it would be expected that 4.3% of these companies will fail each year not because of coronavirus restrictions, but because they were already at high risk of failure from any short-term drop in revenue and cash flow. However, the impact of COVID-19 will see this figure double and leave the UK economy with insolvent debts totalling £8.6bn this year.

Will Coronavirus affect my loan?

Loan and credit card payments to be frozen for three months in UK.

The financial regulator has announced plans to freeze loan and credit card payments for up to three months as part of emergency measures for consumers impacted by the coronavirus outbreak. They have also announced plans to help businesses that are struggling in the current climate.

The new measures which could come into force by 9th April is aimed at consumers and renters who are not benefiting from existing relief measures that have targeted homeowners – with mortgage payment holidays – or business owners.

The FCA has advised that banks and credit card providers will have to ensure that consumer credit ratings are unaffected by any of the measures.

If you are looking for a loan or bridging finance for your business in the agricultural sector. Feel free to give us a call or email us today and we will be happy to help!