Leaders in Agricultural Lending for over 90 years
The only constant within the agricultural industry is change and, whilst change is constantly happening, the speed of change is accelerating; as the new Agriculture Act is implemented, providing a transition from area-based support to the new ethos of ‘public money for public goods,’ a move to a low carbon economy, and increased volatility within agricultural markets.
In times of change and uncertainty, farms and rural businesses will increasingly look to their main stakeholders, including their lender, for certainty.
Just like they have done for more than 90 years, AMC continue to offer long term loans to farmers, estates and rural based businesses, allowing the borrowers to concentrate on the success of their business.
One major change to be aware of is that many other banks now offer loans repayable over a long term of 15 or 20 years, but only commit to the farm business for 5 years. It is important to note that there is not an automatic renewal after the initial period, but these clauses allow the banks to review the full facility and, if it is renewed, they may charge an additional fee, change the terms and/or interest rates. This is potentially an expensive exercise every 5 years and, for those businesses taking on sizable borrowings, do they want to be reviewing these facilities on such a regular basis, particularly should the lender change their lending policy or appetite for agricultural lending?
AMC continue to offer borrowing which simply allows the business to get on with the day-to-day running, whilst also being aware that AMC are contactable if their situation changes.
In addition to the above and the usual variable rate loans, AMC also offer the following:
LONG TERM FIXED RATE AGRICULTURAL LOANS**
At a time when the Bank of England Base Rate is at a record low, AMC are able to offer competitive fixed rate loans for periods from 5 years to 30 years allowing businesses to lock into a fixed rate of funding and know the exact repayment amounts for the full term.
INTEREST ONLY AGRICULTURAL LOANS
AMC offer the ability to repay borrowings on an interest only basis, allowing capital to be repaid at the customers discretion. AMC will normally allow loans to be passed from one generation to the next* or, alternatively, capital repayment holidays are also available on annuity (capital repayment) loans from the outset.Despite the working restrictions imposed by Covid-19, over the last 12 months the Carter Jonas AMC agents based in Yorkshire have submitted agricultural loan applications to the value of over £28m. Throughout the UK, we helped our clients with more AMC lending applications in 2020 than anyone else.
As specialist AMC Agents, Carter Jonas can help to secure loans for a variety of business purposes and are available to discuss any opportunities in confidence.
Examples of recent agricultural lending
Below are three case studies of recent AMC deals, which the Carter Jonas York office has been involved in over the past 12 months.
Finance for an intensive livestock unit and tourism facility on a Yorkshire farm
A traditional farm business was looking to reduce their reliance on arable cropping and the BPS income, and the next generation was keen to become involved. They looked to both construct a new pig rearing building, and also develop a range of traditional barns into a tourism facility.
Finance for a farm purchase for a non-farmer in Yorkshire
Carter Jonas was contacted by a customer who was looking to invest into agricultural property.Farm Loan Restructure in Yorkshire
A traditional family farm business was unhappy with their existing lender, having gone through a period of change. With a new partner in the business and improved financials, the lender was still requiring expensive budgets and cashflows to be provided.If you wish to discuss any lending proposals further, please contact us.
* Subject to AMC credit criteria and your obligations to AMC continuing to be met.
**There is always a possibility that interest rates may go down leaving a fixed rate loan at a higher level compared to a variable rate loan. However, if interest rates rise, a fixed rate loan will remain at the same rate.
AMC loans available for business purposes only, provided on a secured loan basis. Minimum AMC standard loan £25,001. To meet customer requirements, lending criteria will vary. Lending is subject to status.
