Recently in Farm borrowing Category

Long term prospects for UK cereals growers are still positive but higher input prices and the effects of drought may put short term pressure on cashflows, warned Lloyds TSB’s agriculture director Gareth Oakley at last week’s Cereals event.

He called on farmers to discuss requirements with their bank manager sooner rather than later. “There may be particular problems for growers who committed to sell large volumes of their crops forward. If they do not grow enough grain then they may be forced to buy in expensive stocks to cover their commitments.”

Short term issues could be addressed either by early discussions with cereal buyers to agree a strategy to deal with any problems or managed through cash flow if banks were involved early enough and understood that an action plan was in place.

Discounted loans at 0.8% lower than normal rates are available through AMC which has access to European Investment Bank funding to support small and medium sized businesses.

Typical eligible projects include buildings, grain dryers, robotic and other milking kit, poultry housing equipment, vegetable and milk processing plant.

Vehicles, renewables, slurry and water storage may also qualify as well as other projects such as farm shops, orchard establishment, dairy cows, field drainage, research and development.

The minimum loan amount is £25,500 while the maximum is about £11m. Loans are for up to 10 years and can be base rate linked or fixed interest rate, on interest only or repayment terms.

With the total fund pot limited to £250m, there has already been a high level of interest so anyone wanting access to it should act quickly, says AMC.