What is a bridging loan for a farm?
A farm bridging loan is a type of short-term, secured finance that uses a farm or agricultural property as security for the loan.
They are used to fund over periods of 1 month to 3 years, with most loans falling between 1 and 18 months.
In many cases, there are no monthly repayments to make during the loan term as the interest can be rolled up, or retained by the lender and repaid when the loan is redeemed.
Who can apply?
We can offer this type of finance to UK or foreign nationals on an individual basis. We can also arrange borrowing for company structures, including:
- Partnerships
- LLPs
- SPV limited companies
- Trading limited companies
- SIPPs
While we can finance overseas borrowers, we only offer finance secured over UK assets.
Will I qualify?
If you’re a borrower with a UK agricultural asset, are looking to borrow a maximum of 70% of the value of the asset and have a suitable exit strategy, there is a great chance that you’ll qualify.
To understand if you’ll qualify, get in touch and we’ll be able to advise you instantly and give you a written agreement in principle in 1 hour.
Do you offer agricultural finance to borrowers with bad credit?
Yes, we have a range of specialist bad credit bridging loan products that can support borrowers with almost any credit issue including missed payments, defaults, CCJs, IVAs, mortgage arrears or historic bankruptcies.
What can the funds be used for?
We can arrange funds for almost any purpose, including:
- The purchase of agricultural or equestrian properties or farmland.
- Refinancing property or land.
- Funds for business purposes, including cashflow, expansion, equipment purchase or livestock purchases.
- Finance to save distressed assets or prevent repossession.
- Property development or planning gain finance.
How much will it cost?
Bridging loan rates start at 0.39%, although for a larger farm or more commercial agricultural property, you can expect to pay rates from 0.75% per month.
For a rate of 0.75% per month, you would pay £750 interest per month for every £100,000 borrowed – although this is usually added to the loan and repaid when the debt is repaid.
On top of the interest costs, there will also be a lender arrangement fee to pay, which is usually 1-2% of the loan amount.
What information will I need to provide?
The application process is quite simple and the amount of information limited. When applying for a bridging loan, you can expect to provide:
- Details of your assets and liabilities
- Proof of ID and address.
- Details of your exit strategy (how you plan to repay the loan).
- Details of your credit history (although credit issues won’t necessarily prevent you from qualifying).
