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UK Agricultural Finance continues to lend

Despite the disruption caused by Covid-19, UK Agricultural Finance (UKAF) has continued lending and has had a regular flow of loans completing.


The first few months of the year have been a busy time, with increasing numbers of enquiries after the uncertainty around the election. Unlike other lenders, UKAF has kept writing loans during the lockdown, thanks to secure funding lines across its bridge and term products, supported by a rapid move to remote working.

UKAF and the industry have faced the challenge of finding valuers to visit properties, but the team’s ability to lend against agricultural land allows for more flexibility in what is valued, and the nature of farmland and buildings making social distancing much easier to maintain. Indeed, some loans are proceeding based on a mix of a Red Book valuation on the land and barns, but an estimate on the farmhouse.

The team recently completed a loan of £260,000 helping a mixed farm in north England whose main long-term lender would not offer them any flexibility, without disproportionately high penalty charges and two current account providers that were both pulling out of the agricultural market. The borrowers own a substantial farm with acreage and woodland, tenanted cottages and had a good track record of servicing their debt, plus 400 cattle and around 2,000 sheep. UKAF was able to design the loan for a 38% LTV (with an associated attractive interest rate) by persuading the main lender to release part of their security over a couple of fields for UKAF’s first charge, topped up with a second charge against the remainder of the farm. Despite the Covid-19 uncertainty, UKAF has maintained its constructive approach to providing loans, all without changing its lending criteria, since its own investors understand the long-term, attractive nature of farming.

Louise Old, head of businesses development in the North East and Scotland, commented: “We are thrilled to be able to assist our clients during lockdown and is testament to our commitment to help the rural and agricultural communities across England Scotland and Wales and our ability to commit capital to new loans during these challenging times.”

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