Date
18 May 2021Category
Azets is delighted to announce a strategic partnership with specialist UK asset finance provider Propel to give businesses access to plant and equipment to drive productivity and growth. With a 25-year track record in supporting British farming and with 40,000 business customers including many Azets’ clients, Propel’s specialist agricultural finance team has the knowledge, understanding and experience to provide best-in-class asset-finance solutions to meet each farm’s individual requirements.
Ploughing a New Furrow - Financing farm diversification
Throughout the pandemic and beyond, British farms have succeeded in sustaining the production of high quality and nutritious food ‘from farm to fridge’ to meet consumer demand. During this time, asset finance has stepped up as a powerful solution to enable farmers to acquire vital machinery and equipment, ranging from tractors, trailers, combine harvesters, handling machinery and robotic milking machines, through to forestry equipment and the latest agri-tech innovations.
With shifts in the way farming is funded, many of Britain’s progressive and entrepreneurial farmers are exploring diversification to boost their incomes and profitability over and above conventional farming production, in addition to providing opportunities for the next generation.
Harvesting new income
According to the latest figures published by DEFRA in February 2021, total income from diversified activities in 2019/20 stood at £734 million. Across all farms, income from diversified enterprises accounted for 28% of total farm business income. The study identified that 68% of farm businesses had some diversified activity in 2019/20 using their farms’ assets such as land, building and machinery.
As well as the much-publicised ‘pivoting’ to sell produce directly to the public, British farmers are focusing further on maximising income generation from their resources. Ever resilient and resourceful, farmers are utilising their land and buildings for a variety of activities, including holiday cottages, serviced offices and wedding venues, stables and riding schools, renewable energy and camping and caravanning.
Whilst asset finance is widely recognised by the UK farming community as an established way of acquiring conventional plant and machinery, it has also come to the fore in financing an entirely new wave of diversified assets, allowing farmers to extend their offerings without putting a strain on their existing working capital.
One of the many farms that works with Propel was able to purchase 12 stylish new glamping pods to realise their ambitions for diversification in time for the post-pandemic ‘staycation’ boom in the UK. Propel discussed the farm’s plans and tailored a hire purchase facility to fit their business and cashflow needs, enabling them to conserve vital working capital and acquire the stylish and superior quality pods. With interest rates fixed for the duration, forecasting was also straightforward, allowing the business to budget with complete certainty.
