If you are thinking of starting a farm, or your current agricultural project needs some TLC, your first line of thinking will be funding and financing. Although some farms are eligible for rural grants and government funding, much of these are supported by the EU.

With Brexit going ahead early next year, farmers may not be able to rely on this funding for much longer and should seek information about other funding options.

Agricultural businesses can be successful when they are in the right location and offer produce which is in demand. However, these rural projects require a lot of investment to get off the ground, which can be difficult to find. If your farm needs a funding injection, or you need some capital for a new rural site, there are many alternative financing solutions you could be eligible for.

Because of the fundamental differences between commercial businesses and agricultural businesses, it makes sense that the finance market offers different funding options for farmers. After all, a farm is usually more than a business and a livelihood – it’s a home. Farmers face a multitude of challenges today, but there are many agricultural finance experts like Genie Lending to lend a hand. Here are the specific types of agricultural finance available.

What is Agricultural Finance?

One of the most suitable options is to find a lender which specialises in agricultural finance. They will understand your particular needs as a farmer, and can supply specific funding for various parts of the business. From asset finance and vehicle finance to specialised funding for green energy projects, agricultural finance is the ideal solution for rural business owners.

What about Asset Finance?

If you don’t have the cash upfront available to invest in important farming assets, you can spread the cost over an agreed period with asset finance. Use this type of funding to buy or replace milking equipment, forestry machinery or any other apparatus with a big upfront cost.

Land and Property Development Finance

If you need to renovate farm buildings or build something new, a finance broker can help. Apply for a commercial mortgage to develop your land or existing property. There is also Project Finance which you could use for barn conversions or a farm shop to try and boost revenue.

Green Energy Projects Finance

You might see potential for more income with a green energy project. Use this type of finance to develop a wind farm, solar farm or anaerobic digestion plant.

Vehicle Finance

Farming requires specialist vehicles, and if they need replacing they can be extremely expensive. Vehicle finance can help farmers acquire tractors, feed mixers and combine harvesters if they can’t afford the full amount. You can choose between hire purchase and lease agreements.

Livestock Finance

One of the most important assets of the majority of farms is livestock. If you need more animals to produce your products then you can apply for livestock finance which can be used to invest in pigs, sheep, poultry, dairy and beef.

Business Loan

Alternatively, you could apply for a short term business loan. However, with many banks halting their lending you could have to turn to an alternative finance expert. You could get all the benefits you’d get from the bank, such as a flexible overdraft and large cash sums – but without the tedious application process.

Applying for Farm Funding with Genie Lending

Whether you need to update your farm buildings, expand your livestock or invest in new machinery to update operations, Genie Lending can help. As experts in agricultural funding, we understand the financial challenges farmers face and aim to provide an alternative to bank loans.

Applying for finance is really easy. First you just need to contact one of our business finance managers, who will discuss your project with you and the different funding options available. You may need to supply some business records, the process is fast and painless compared to a bank loan application. You could have the cash you need in as little as a few days – so you can get on with running your farm.

How will Brexit affect Farming Funding options?

The shock Brexit vote earlier this year has plummeted the future into uncertainty – and perhaps no industry more so than the farming sector. The EU supplements farmers through its Common Agriculture Policy, so without EU funding, the agriculture sector could face a blow.The Minister for Agriculture Michael Creed has said that the UK’s exit from the European Union is likely to have a significant negative impact on the CAP, particularly from 2021 onwards.
Funding for farmers is not the only problem brought about by Brexit. Without the single market which allows free trade between member states, the future of trading produce is also at risk. There could be additional costs for farmers who wish to trade abroad, and there will now be different standards for EU and UK produce.

Regardless of whether you wanted to stay or to leave, the effects of Brexit on agriculture will be far ranging. We advise farmers to get their finances prepared ahead of Article 50 being invoked – and Genie Lending is here to help.

Farm Finance Options

Currently, EU subsidies currently make up between 50%-60% of incomes on UK farms. It is not yet clear what support will be made available by the government beyond 2020, so the future of farm funding is very unstable. This instability is heightened by the fact that farmers may have to pay additional trade costs, and don’t know who they will be selling to in the future so can’t estimate their long term income.

High street banks are unwilling to lend to businesses which ae facing uncertainty. It is difficult to get approved for a business loan without years of trading history and accounts, and some banks also ask for a minimum monthly turnover. Many agricultural businesses will not be able to guarantee an allocated turnover for the next few years.

Luckily, there are now a variety of alternative financing options which are designed with farmers in mind. Rural businesses can apply for agricultural finance, peer to peer lending or asset finance to keep things turning over. Here at Genie Lending, we understand the modern challenges faced by farmers, and can recommend the best solution. Whether you need a cash injection to aid cash flow, invest in new machinery or repair outbuildings, we have the right alternative finance solution for you.

Whether it’s a new farming projects or you just need a little help to get you through a tough season, agricultural finance can help. Give us a call to speak to an agricultural finance specialist today.

UPDATED: JUNE 2018

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Gone are the days of going cap in hand to the business banker clutching armfuls of finger in the air financial projections produced, at cost, by your accountant.  Gone also are the days of waiting interminable amounts of time jumping through endless banking hoops whilst our “local” banker presents funding cases to far flung decision makers.  Gone are the days of being forced to proffer more and more personal security to support the funding requests of a growing company.

With the SME denied the help of traditional banks, largely due to the outcome of the 2008 crash and the impact of the Basle Accords on bank liquidity ratios, but with demand for vital sources of working capital still there, the number of alternative finance providers ready to plug funding gaps has grown apace.

Businesses come in all shapes, sizes and hues and, as a consequence, every business has its own unique funding requirements.  Alternative finance providers have emerged to focus on specific segments within the SME funding mix.  This is great news for the SME exploring its funding options, but the myriad of potential solutions does create its own challenges and the plethora of new players delivering multiple options can make it somewhat overwhelming for the uninitiated to tread a well planned path through the maze of new finance providers.

In an unstable economic climate banks are less likely to lend – especially to risky business investments. In today’s unpredictable financial market, it is becoming more and more difficult to get approved for a bank loan, which is why the trend for alternative finance solutions keeps on growing. Without these alternative funding options, many businesses would have ceased trading or would-be successful property investors wouldn’t have been able to buy a second property.

In 2014, a record £1.74 billion was raised through alternative finance models. So isn’t it time you found out more about it?

Advantages of Alternative Finance

Many alternative finance solutions are ideal for SMEs or start-ups, not just because they will struggle to receive traditional funding, but because they can also benefit from better terms.

• Ease of application
• More chance of guaranteed acceptance
• Flexible funding and repayment options
• More favourable terms for the business

Read on for a comprehensive guide of the commercial finance services available.

Types of Alternative Finance

There are many different variations of alternative finance, and it’s crucial to choose the right model for your business. There’s also hundreds of different platforms to apply for alternative finance depending on which specialist funding you choose. Some brokers will specialise in all types of alternative finance. Here is a basic rundown of some of the most popular alternative finance solutions.

Business loans

Whether you need a short term cash injection to cover the costs of staff wages and stock, or you’re investing in a new business premises, a business loan could help. An alternative finance provider can raise finance for business owners without the traditional application process at the bank which can take weeks to approve.

Bridging finance

Need to raise some capital at short notice? With bridging finance you can have the cash in your bank at very short notice, to buy a property at auction or solve your cash flow problems before a large payment is to be made. Bridging loans can be up to £20 million but need to be repaid within 12 months so this is a short term option.

Invoice finance & invoice trading

Many SMEs have a cash flow problem because invoices take too long to be paid and there are constant outgoings to pay. With the help of invoice finance, businesses can release the cash straight away to be used elsewhere and keep money running through the organisation. This type of finance is fairly low risk because you won’t be borrowing any more money than you’ll have coming in.

The time when a company was obliged to hand over the whole of its debtor book to a factor or invoice discounter is long gone as is the time of restrictive contracts from which it is prohibitively expensive to escape.  For companies trading on credit terms with their customers, it is now possible to sell invoices on in a selective manner, entirely at the SME’s discretion, to a pool of individuals or institutions again through a funding platform. Funds are then received immediately to a pre defined percentage of the invoice’s value with the balance less fees being received at invoice collection delivering instant cashflow from working capital tied up in unpaid invoices.  Structures also exist that enable 2 or 3 year loan arrangements, either fully amortising or bullet repayment, driven by the value of the SME’s debtor book.

Peer to peer lending & crowdfunding

Peer to peer lending is an attractive alternative finance solution for commercial borrowers. In most cases you’ll receive a better interest rate and it works the same as a traditional loan – the only difference is you’re lending from individual investors rather than a financial institution. Banks aren’t the only financial institutions with large sums of money to lend. Wealthy individuals can be matched with small businesses to offer an alternative source of funding with more flexible terms.

Debt transactions between individuals and/or institutions facilitated by a platform.  Many individual contributors make up the sum ultimately borrowed with terms between 6 months and 5 years typical. Interest rates can vary from as low as 9% or as high as 18-20%, dependent on the quality of the proposal.  Funds can be delivered in a matter of a week or so in some instances with potentially very little in the way of business plans/budgets being required.  With many platforms in the market, it is essential to work with a platform that will accept the credit risk of your business and present your funding proposal to potential lenders.  If going down this route, do your homework as the character of each platform is very different…

As implied, the sale of a proportion of your business to a number of individual and/or institutional investors in return for investment.  Again, there are a number of platforms who facilitate these types of transaction and they each are different in nature and what type of deal they are looking to propose to their investor base.

Asset finance

There are many different types of asset finance, and this solution works well for industries such as farming where businesses have expensive equipment to purchase and maintain. Business owners can free up cash in their assets to use elsewhere, or spread the cost of machinery over a length of time. Secure a comfortable loan by lending against company assets such as machinery, vehicles or equipment. It is a way to release cash tied up in business assets for you to use elsewhere.

Pension Led Funding

A good pension is a valuable asset which can be used to secure an alternative business loan. Mechanisms which allow SME owners to use their pension funds to invest in their own businesses within a HMRC approved and potentially tax efficient environment.

Merchant Cash Advance

Take card payments as part of your sales? If so, you could benefit from a merchant cash advance. This is an innovative funding solution which is related to your monthly turnover in card payments. You repay the funder through a percentage of your daily card receipts so it a short term solution reducing the chance of long term debt.

Interested in the benefits of alternative finance solutions but not sure which lending option is right for your business? Well you’ve come to the right place. Here at Genie Lending we specialise in a variety of alternative finance options which can be tailored to your business needs. From short term and long term loans, secured and unsecured business loans to commercial and buy to let mortgages, we’re guaranteed to have a suitable option.

Updated: May 2018

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Asset finance can be a suitable solution for companies who have been refused a bank loan. The only difference between a traditional loan and asset finance, is you have to set out how you will use the money and what will be purchased. What you buy is referred to as an asset. Anything of value which a company requires to conduct business can be classed as an asset.

Here are some of the most popular examples of equipment and assets obtained using asset finance.

Vehicles

Many companies require a fleet of vehicles to operate, whether it’s company cars, trucks or transit vans for deliveries. If the business grows faster and you suddenly need more vehicles to keep up with demand, asset finance can help you manage cash flow.

Machinery or Specialist Equipment

If a company owns a warehouse or a factory, it will need a selection of specialist equipment to operate. It is a huge expense to purchase all of the machinery outright, so finance can help companies just starting out or launching a new location. Also, if equipment suddenly needs replacing, asset finance can ensure companies don’t lose too much time out of production.

Office Equipment

Most businesses rely on standard office equipment such as computers, printers and photocopiers. Finance can be used to purchase or replace these items as required.

Catering Appliances

If you run a catering business, any kitchen appliances can be counted as assets. You may also need specialist ovens or industry grade applications such as refrigerators and freezers, which can be a large outlay. In these circumstances, finance is ideal for kitting out the kitchen and work area with everything you need to run a successful operation.

Agricultural Machinery

Farms require a range of essential equipment and machinery, such as tractors, milking robots and crop machinery. When farmers need to replace equipment, finance is often the best solution.

Want to find out more about asset finance and if your project is eligible? Get in touch with our experienced asset finance advisors to discuss the options available.

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The conventional banking system simply isn’t working for most of us. Without alternative finance providers offering solutions such as peer-to-peer lending, crowdfunding and asset finance, most businesses wouldn’t be here today. These alternative finance specialists are plugging the gap the banks can’t fill, and giving a boost to the economy.

The problem with banks

Why is it so much harder to get a business loan from the high street these days? Financial crashes and economic uncertainty has led to most traditional banks being extremely cautious about lending. The terms on which businesses can secure credit from financial institutions are becoming increasingly unfavourable, so only the biggest and most established companies are approved. This creates a huge problem for start-ups and SMEs, who can’t get their businesses off the ground without a cash injection from the beginning.

In addition, lending from the big banks is also very expensive. The cost of borrowing – if you actually pass the application stage – could make it difficult to repay in the future.

The Alternative Finance option

Thankfully, if you’ve been rejected by traditional financial institutions then there is a way to beat the banks. There are now a wide range of funding sources to explore, allowing entrepreneurs to finance their great ideas. While the banks have been busy failing to give credit to small businesses, private investors and finance experts have seized the opportunity to offer alternative finance solutions. You can lend the same amount of money as you would from a bank using these different methods.

P2P/ Crowdfunding

Peer to peer lending is basically borrowing money off individual investors rather than a financial institution. Crowdfunding usually involves a number of investors. This type of lending is suitable for all types of businesses and is much easier to secure than a bank loan.

Asset Finance

If you have a fledgling business which needs expensive machinery or equipment in order to grow, asset finance could be the solution. It allows you to spread to upfront cost of the equipment over time, so you don’t need to worry about finding large amounts of money for necessary business assets.

Want to find out more about how businesses are beating the big banks? Take a look at Genie Lending’s case studies.

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Cash flow funding is a solution to the problem. There are various forms of finance which can help businesses better manage their cash flow and avoid the downward spiral into debt. Alternative finance providers offer direct solutions to help companies balance the books, without high interest loans. The right cash flow funding solution depends on the type of business and its finance needs. Here are the main types of funding available for cash flow purposes.

Merchant Cash Advance

This type of finance is perfect for any business which takes card payments – shops, pubs, salons, cafes, B&Bs, car dealers. It is a fast and short term finance option for businesses, allowing them to lend cash based on their monthly turnover from debit and credit cards. If you have been taking card payments for more than four months then you are usually eligible for an immediate cash advance of up to £500,000.

Invoice Finance

Another way of raising fast funds to improve cash flow is by invoice factoring. If you need the money for the service you’ve provided sooner rather than later, an invoice financier can pay up 90% of the invoice immediately. This allows businesses to free up capital that is locked away in unpaid invoices. It shortens the billing cycle and can help you keep on top of bills and staff costs, rather than having to wait 30-60 days for invoice payments.

Asset Finance

There are always finance solutions, even if you are operating at a loss or you don’t have security to put up against a loan. Asset finance is suitable for agricultural businesses, manufacturing companies or any other organisation which has expensive assets such as machinery or equipment. The funding is borrowed against business assets, from equipment to vehicles. You can also use asset finance to fund a new essential purchase, by leasing or hire purchase with flexible payments.

Getting a grip of cash flow can be really difficult, as you know what expenses you have but often money coming in is beyond your control. Don’t suffer in silence, get in contact with Genie Finance to discuss the range of cash flow funding options.

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How does it work?

Asset finance is a very versatile option for businesses which require expensive machinery, have large maintenance expenses or have major capital costs to consider. It can help organisations spread the cost of an expensive piece of equipment, or used to free up cash in existing assets to be used elsewhere in the business.

Most businesses just don’t have the money available in their cash flow to make much-need capital purchases. So how do these companies continue to grow and stay ahead of the competition if they can’t afford to make important investments in equipment? They trust asset finance and spread the cost, so they can enjoy the benefits of the new purchase straight away without having the upfront expense.

Asset finance is extremely flexible, so there is usually a solution that works for every business. From new computers to fixing a tractor, the funds can be used on any capital purchases and paid back in manageable instalments. Here are some examples of the different types of asset finance:

Hire or Lease Purchase

Think of this form of finance as similar to buying a car. It’s a great option if you want to own your asset at the end of the term, and offers flexible repayment options. When buying a car on finance you have the option of giving it back at the end of the agreement, or paying a little more each month so the car is yours. With hire or lease purchase you will own the asset once it is paid off.

Finance Lease        

This is like renting a piece of equipment long term, which can have benefits. For example, at the end of the agreed period the asset it sold and you’ll receive most of the profits. This could be a viable option for machinery or equipment which doesn’t have a long lifespan or you won’t require after a few years.

Sale and Leaseback

Allows businesses to effectively sell off their assets and lease them back. It allows cash to be unlocked from assets, such as a vehicle fleet, to be used for other expenses where it is needed.

The type of asset finance you choose will depend on what you need to invest in. If you’d like to find out more about flexible asset finance speak to one of our advisors today.

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1. Borrowing from a family member

If you have a relative with some spare cash in the bank, and they have offered to lend you money to fund your business, then this could be a favourable option. Of course you will bypass the long application process and will probably have little or no interest to pay back. However, consider the implications if you can’t repay the loan, and how it could affect your personal relationship.

2. Peer to Peer loan

Rather than turning to a bank for a business loan, you could borrow from a private lender. The internet has made this more accessible, with online platforms providing borrowers with a range of affordable options. You might not be able to take out this type of loan if you’re not already trading, however crowdfunding platforms are often willing to fund start-ups.

3. Government start-up loan

If you’re launching a new company, then you may eligible for a start-up loan from the government. They offer an unsecured loan with a low interest rate, so it’s definitely worth looking at this option before shopping around for other business finance.

4. Asset finance

If you’re already an established business, then you could be able to borrow large sums of money against your assets. This means that you can get funding which is secured against your business assets such as vehicles or machinery. You can then use the cash where you need it most, such as replacing equipment or improving cash flow.

5. Angel investors

If you are prepared to give up a share in your business, then the angel investor route may be for you. Think of it as Dragon’s Den – you’ll have to create a pitch and encourage investors to believe in your business and its future. Many angels are entrepreneurs themselves so understand what you’re going through. If you don’t have good credit or have any assets to secure a loan, you may want to offer a percentage of the business instead.

Need to chat to a professional about business finance? Contact our friendly team today to discuss your options.

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If you want to make it alone, then it’s time to consider your finance options. Whether you’re starting up a brand new business or simply need some investment to take your company to the next level, we’ve rounded up some of the most suitable solutions for attracting capital.

Invest with Business Loans

Let’s face it, a high percentage of businesses would have failed without a business loan. If you want to compete in a market and continue to grow, business investment is essential. Here are some of the most common purposes business owners require a short or long term loan:

• Business expansion
• Purchase of assets or stock to keep up with demand
• Property renovation or repair
• Staff wages
• Tax liability

Some kind of loan will be essential at some point. Nevertheless, there are many different options for businesses. The process of applying for a loan at a bank is long and often unsuccessful. Many businesses now turn to alternative finance options, which offer the same amount of capital without the hassle.

Don’t Forget Asset Finance

If you’re struggling to get a business loan, you could qualify for asset finance. Some loans need to be secured against something – as a mortgage is secured to a property. If you don’t make your mortgage repayments, the property is repossessed. Asset finance works in a similar way if you have expensive machinery or equipment. You can release the cash locked up in your assets to use elsewhere in the business.

Investing in the latest equipment or machinery is essential for many businesses, and it can actually play a part in attracting clients or customers. Many business owners would love to upgrade, but can’t find the necessary funds in cashflow. There are finance options available to help you grow in the way, such as leasing and hire purchase, which lets businesses spread the cost of new equipment over time.

If you’d like to find out more about investing in your business and what could be possible, talk to one of our financial experts today.

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