Agriculture

Farm finance for agricultural equipment and machinery

At Close Brothers Asset Finance our team of specialists has significant agricultural finance experience working with customers in the farming community.

The farming and agriculture sector is a vital part of our economy. One of our oldest industries, it continues to adapt in response to market forces and wide-ranging sector developments.

Today, there’s a wealth of new machinery and technology available to help farms maximise their potential for growth and improve efficiency. There are also real benefits to be had from investing in sustainably produced biomass, especially when used to create renewable energy.

We know how high running costs can be for agricultural businesses and that it can be difficult to raise the capital for the assets needed to support your ambitions. This is where Close Brothers can help. Our team has in-depth knowledge of the industry and extensive experience of delivering affordable funding for agricultural businesses. We’ll help you find a way to spread the cost of the machinery, vehicles and technology you need, through a tailored hire purchase, lease or refinance package.

There’s no minimum entry level for our asset finance solutions and we can fund all types of assets up to £5 million+. From renewable energy solutions to farm machinery, we’ll help guide you through the process and enable your agricultural business to take full advantage of the benefits of asset finance.

Tractor

Typical assets we finance include:

  • Tractors
  • Combine harvesters
  • Farm vehicles
  • Forestry machinery
  • Farm machinery - milking and dairy equipment
  • Biomass boilers
  • Wind turbines
  • Solar PV
  • Hydro projects

Contact your industry specialist

01355 572370

Scotland

2nd Floor, Orbital House,
3 Redwood Crescent, East Kilbride
Glasgow
G74 5PR

Send us an enquiry

Finance products we offer for the agricultural industry

  • Hire Purchase
  • Refinancing
  • Finance Lease
  • Operating Lease

Hire Purchase - Spread the cost over time

Hire Purchase enables you to acquire an asset while paying for it in instalments over an agreed timescale – the term. At the end of the term, you have the option to purchase the asset outright.

Hire Purchase lets you spread the cost of your investment over the life of the asset, making it easier to budget. Hire Purchase is particularly suitable for acquiring vehicles, machinery, construction and commercial equipment with a resell value.

 

Benefits of Hire Purchase

  • More time to repaySpread the cost over the life of the asset
  • SeasonalityWe can structure repayments to take account of seasonal fluctuations in your cash flow
  • Keep controlYou are the owner of the asset for tax purposes and can normally claim capital allowances
  • Tax efficientYou can potentially offset your hire purchase interest and charges against pre-tax profits
  • Potentailly reclaim VAT on the capital cost (there are special rules for cars) 

Refinancing - When you need a cash injection

Refinancing is a quick way to access the value of assets on your existing balance sheet and redeploy that value elsewhere within your business – for example, to fund a deposit on new equipment or unlock some working capital to ease cash flow.

Sale and HP Back is a form of refinance that can be used against most types of equipment, making it suitable for companies of all sizes, including sole traders. It works by us purchasing the asset and financing it back to you. Repayments are calculated in line with the income stream that will be generated by the asset and at the end of the refinance term, you own the asset.

This option applies whether you already own the asset or are using it under a finance deal with another provider.

 

Benefits of Refinancing

  • EfficiencyUninterrupted use of the asset
  • Spread the cost furtherWe can take over the finance agreement you have with another provider and extend the term
  • ChoiceGive your business a cash injection or use the money to buy other assets that may not be accessible through hire purchase or leasing agreements

Finance Lease - User benefits without the ties of ownership

Our Finance Lease arrangement lets you use the equipment you need without having to buy it outright. You pay us rent for the full use of it. The rental period (the primary lease term) is flexible and can be tailored to your usage needs and cash flow.

During this period, you will pay us the full cost of the asset, including interest.

Then, when you reach the end of the primary lease term you can choose to:

  • continue to use the asset by entering a secondary rental period
  • sell the asset and keep a portion of the income from the sale
  • return it to us

 

Benefits of Finance Lease

  • Low initial outlayQuick access to the asset you need without a heavy upfront investment
  • FlexibilityRental payments and lease periods can be designed to match your cash flow
  • Cash backReceive most of the income from selling the asset if you choose to do so at the end of the lease
  • Tax efficientRentals can usually be offset against pre-tax profits
  • Reduce costsReclaim VAT on rentals

Operating Lease - Keep your options open

Similar to a Finance Lease, an Operating Lease allows you to rent the asset from us while you need it. The key difference between the two is that an Operating Lease is only for part of the asset’s useful life.

This means you pay a reduced rental because the cost is based on the difference between the asset’s original purchase price and its residual value at the end of the agreement.

You get full use of the asset for as long as you need it, without the burden of responsibility of disposing of it or recouping its residual value.

 

Benefits of Operating Lease

  • Low initial outlay - Quick access to the asset you need without a heavy upfront investment
  • Freedom - Full use of the asset without having to buy it outright
  • Flexibility - Option to re-rent, purchase or return the asset at the end of the term
  • Pay less - Rental cost is reduced as it is based on a percentage of the original capital cost
  • Off balance sheet funding
  • Reduce costs - Reclaim VAT on rentals

 

 

 

 

To find out how we can help, please contact us today.