Farmers using bridging loans to diversify
Many farmers are looking for ways to diversify their business. Bridging finance is one way to provide funds to finance new business strategies.
Farmers fear that after Britain leaves the European Union, farming subsidies could be reduced. Faced with an uncertain future, many are looking at how to generate extra income sources. There are a number of ways they’re doing this. Some are installing renewable energy facilities that generate power from the sun, wind or biomass. This can save energy bills and excess power can be sold.
New produce can be made. For example, dairy farmers can make cheese and farms with fruit trees can make juice or jam.
Property, such as old barns, can be developed and renovated to add capital value to the farm.
There are several ways to raise finance to pay for diversification. Farmers can remortgage their property, loans can be provided by banks, and this is where bridging loans can be useful. When looking for funds, it helps to use a broker who knows specialist agricultural finance lenders as these lenders understand the complexities of running a farm.
For all loans, farmers need a sound business plan to detail how the diversification project will generate extra income for the farm. A sound exit strategy for when and how the loan will be paid is needed for bridging loans.
Farmers are facing unique challenges and need to adapt to survive. With the help of bridging loans and other finance options, farmers can plan a healthy financial future.