Shop around for best financial package while rates are favourable

Published July 4th, 2014

Farmers looking for a new loan or restructuring their finances should take advice and shop around for the most suitable deal as the range of funding sources is enormous.

By Matthew Anwyl, managing partner of Berrys

Even a slight variance in interest rate could make a big difference to the overall cost of a loan over its term.

The money markets have changed following the banking crisis and loans are now structured in a different way with costs often loaded up front in arrangement and set-up fees.

The long term outlook for farming remains positive and farmers need to get their businesses on a sound financial footing and take advantage of their current lower risk status to secure a good deal.

As agricultural valuers we have strong connections with the banking industry and have a wide network of contacts with most leading banks to help source finance for our clients.

Finance can be required for:

·         long-term projects such as buying property – houses, farms, equestrian, forestry;

·         Working capital and project-based funding: grain stores, chicken sheds, renewables projects or for diversification of a business

·         Re-financing and moving to another lender

·         Business restructuring ie partnerships, companies etc

·         Matrimonial dissolution


The total cost of the financial package will depend on whether it is secured such as a mortgage or overdraft, unsecured lending or an HP finance agreement and we would advise farmers and businesses to review their finance arrangements and consider the mix of existing borrowing between overdraft and loan, aiming to transfer the ‘hardcore’ element of an overdraft to a more structured loan arrangement.

When acting for clients we can advise from a very early stage whether or not a proposal is viable and this may save the frustration, disappointment and cost of an unsuccessful application.

When drawing up an application we understand what the banks are looking for in terms of credit  analysis and budgets and can submit an application to the most appropriate lender.

Banks will assess the application on criteria including as the serviceability of the loan and the security available. The usual requirement is a maximum of 70% loan-to-value but this varies between lenders.

We can then negotiate the loan offer with the bank.

Since the credit crisis, bankers have become more nervous of lending for certain projects and we often have to shop around to find a lender that understands a project such as a renewable energy installation and is prepared to structure a loan to suit.

Traditionally, farmers would have one bank taking a charge over the property but today it is often best to have a mix of lenders to suit your circumstances and what is best for the business.

It is still a very competitive market and agriculture is viewed as a secure and growing sector for most lenders. As such, competitive deals can be secured although interest rate is only one factor that should be considered. The devil is always in the detail.

Matthew Anwyl can be contacted at the Shrewsbury office of Berrys on 01743 271697 email

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More about Matt Anwyl

Chartered Surveyor
Tel: 01743 267064
Mobile: 07970 461581

Matt graduated from the University of London with a BSc (Hons) in Agricultural Business Management, and then from the University of Reading with a Postgraduate Diploma in Surveying.

He is a member of the Royal Institution of Chartered Surveyors, the Agricultural Law Association and a fellow of the Central Association of Agricultural Valuers. In 2009, after successfully passing the required assessment, he was appointed by the President of the RICS as one of only 31 Rural Arbitrators.  He has been the Managing Partner of Berrys since 2008.

Matt has over 25 years’ experience in providing advice to landowners and farmers, in particular in connection with the Agricultural Holdings Act 1986, and Agricultural Tenancies Act 1995. In addition he has extensive experience in providing valuations for loan security, tax planning and sale / business re-organisation. He is a qualified specialist business consultant, providing strategic advice to farm businesses including asset restructuring, business structures, contract farming, alternative land tenure arrangements, financial planning, cash-flow and balance sheet analysis, forecasting and business plan preparation.