HBV Capital farm asset finance
According to the Finance and Leasing Association, from January to September the total lending for agricultural plant was £1.36 billion, up by 11.2 per cent on 2017. We can feel an ongoing concern over a lack of cash, with only a brief respite, as a result of some farmers having received their BPS payments, we understand the RPA expect to have 93 per cent of farmers paid by the end of December. Banking - our customers are constantly reminding us about the bank’s attitude and ‘not being supportive’. Being an ex-bank business manager myself, I can empathise with those customers concerns. Since 2007 in order to recapitalise, the banks have been closing branches and cutting their costs, as a result many experienced agri managers have retired, with very few replacements, leaving a significant vacuum of experienced and dedicated agricultural bank managers. We all know farming businesses can be complex, and profits are becoming quite cyclical and dependent on several factors, not least being the weather, so demand for short term cash flow is spiralling, in the face of reduced overdraft limits.
I think one of the biggest threats to the UK farming industry now, and in the future, is the banks’ lack of specific farming knowledge, experience or regard for the industry. As a result of demand for improved technology and reduced environmental impact, tractor and machinery prices continue to rise far quicker than farm gate prices, making it almost impossible to justify the cost of newer cleaner and more efficient tractors. Most customers are forced to finance them over longer terms, which is okay, as long as you expect to keep them longer, as settling agreements early will ultimately incur more interest payable. HBV Capital Ltd is a wellestablished and award-winning commercial finance brokerage, with 3,000 clients spread across the UK, from Lands End to the Orkney Islands, Anglesey and Belfast. Our business grows by offering consistently competitive finance options, to both existing and new clients; we maintain an excellent reputation with market leading funding providers who enable us to provide the right funding options to satisfy our customer’s asset finance requirements.
■ Find out more at www.hbvcapital.co.uk, or call Robert on 07809 110037 or Andrew Stoakes on 07714 592029.