Traditionally, bank finance for farming businesses has been secured on the assets of the enterprise. With land often wholly owned by families and passed down the generations, this has meant those assets were enough to renew overdraft facilities or secure new lending.
However, as with practically all aspects of farming life, this is now changing as banks tighten up their lending criteria.
Typically, we’re now seeing banks not only ask for the last two or three years of accounts, they also want to see detailed cashflow forecasts showing how the money will be used and how the debt will be serviced.
This is a major change to the agricultural industry, which traditionally has done little if any medium-term forward forecasting. But without it, existing facilities might not be renewed, and new borrowing is likely to be refused.
But don’t worry, help is at hand.
Whitley Stimpson has more than 90 years of experience in accounting, cashflow forecasting and helping our valued agricultural clients secure the funding they need to run their businesses successfully.
So, if your borrowing facilities are up for renewal or you need new financing, get in touch and we’ll help you produce the forecasts you need to secure funding you want.
The article is covered in our Agricultural Spotlight – click the link to read the full magazine, which keeps farmers up to date with the latest accounting changes and challenges.