Lump Sum Exit Scheme funding requirements stumping tenants

Tenant farmers who want to leave farming risk missing out on Defra’s Lump Sum Exit Scheme because they are struggling to get finance in place to fulfil the scheme’s requirements.

According to the Tenant Farmers Association (TFA), there is a good level of interest in the scheme from tenant farmers, but they have come up against a barrier in securing the funding needed for a property to relocate to.

The TFA has now written to the four big UK banks asking for bespoke measures to help tenant farmers with short-term funding.

See also: Lump Sum Exit Scheme: Critical details and pitfalls

Farmers who want to participate in the Lump Sum Exit Scheme must find a property to move to ahead of the scheme’s deadline; this needs to be before they receive a surrender payment for their tenancy and the capital payment from the scheme.

This, warns the TFA, creates a short-term need for funding to secure a property.

It says an “off-the-shelf product’’ is needed, although banks are looking at individual cases.

TFA chief executive George Dunn said: “Having raised this issue with the banking sector, I have been really pleased with how quickly the banks have reacted to what we have asked for.’’ 

The Lump Sum Exit Scheme, which is open to farmers in England who are seeking to retire or leave the sector, closes for applications on 30 September.

The scheme will allow participants to receive some of their future Basic Payment Scheme (BPS) money up front, in return for surrendering their BPS entitlements, and either renting out or selling most of their land, or giving up their tenancies.

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