Funding farmers’ brilliant ideas: Farm finance specialists reveal their favourite diversifications 

From camp sites to curling rinks, renting office space to tank driving experiences, farmers are embracing the opportunities to help sustain their businesses through to the next generation and beyond.

Rural Asset Finance, a leading specialist direct lender to farmers, has been fortunate to fund many such schemes. “It never ceases to amaze me what brilliant ideas farmers have to create an extra revenue stream on the farm,” says CEO Matthew Smart. “It’s a privilege to help them.”

With many farmers currently making plans for the next 12 months, here are a few of Rural Asset Finance’s favourite diversifications they have funded this year. Will they inspire you?

Profit ’til the cows come home

Dairy farmer Stephen Carson’s customers can get fresh milk within hours, after we funded a parlour which included the UK’s first batch milking system.

Eighteen milking robots sped up productivity, saved labour and improved yield on the farm at Strabane, Co Tyrone. The milk from his 600 Jersey cross British Friesians is then pasteurised, bottled and sold at one of Stephen’s four vending machines in local shopping areas. It’s sustainable, convenient – and importantly, Stephen has kept the profit margin right through the supply chain.

Hats off to the huts

Simon Ray knew his smallholding near Edinburgh would not sustain itself, so he decided to open a glamping site with shepherd’s huts.

He chose five – but, like most farmers, needed to invest without tying up his cash or assets. Rural Asset Finance arranged a hire purchase facility secured on the huts themselves, which refinanced the first hut Simon had already bought. This replaced his cash flow – and provided finance on 90% of the purchase price of the other four.

Now he is welcoming his first guests to the site in the Pentland Hills. “Rural Asset Finance just got what we are doing,” says Simon. “They were friendly, efficient, they found solutions. I feel they are on my side.”

Horses for courses

Farming contractor Dave Chandler’s core business is contract farming and spreading lime. But he also grows and sells maize feed, farms his own beef cattle – and with help from Rural Asset Finance, recently bought the next-door equestrian yard to create a £1million-plus livery business.

“The yard had four stalls but we are expanding to a 10-stall livery and menage, where my daughter Molly can keep her horses, stable others and also teach,” he says.

RAF’s bespoke lending package, which also funds rebuilding a house on the site, included consolidating Dave’s existing mortgage and overdraft by repaying his bank in full and ensuring Dave had sufficient working capital in his own account. “When the livery is up and running,” he adds, “we anticipate the new income from the site means the new project will pay for itself.”

Green for go

Jane and Paul Crockett already lived mainly off-grid on the site of their commercial tree nursery. But when they wanted to borrow money to improve the site with renewable electricity, a water treatment plant and a permanent timber home, traditional lenders said no.

“I think they saw us as a couple of hippies after a handout,” says Jane, “instead of a professional business wanting sustainability. No one would look at the whole picture. But Rural Asset Finance got it.”

RAF looked at their business, at Heydon Hill Tree Nursery in Somerset’s Brendon Hills,   and confirmed a secured loan on a long leasehold parcel of land.

 “We’re actually like a typical farm,” says Paul, “in that we’ve got more than enough asset, but are cash poor because everything’s tied up. But Rural Asset Finance understood our vision. They were just completely on our side.”

Flour power

Ancient met modern at Ollie Stoate’s flour mill when RAF finance linked up the firm’s 160-year-old iron water wheel to a 21^st century hydro electric generator system – and in real terms, it has not cost him a penny.

An RAF loan to his sixth-generation Dorset family business supplemented a low-carbon grant, enabling him to convert the wheel, while also installing 30 solar panels on the grain store roof.

“The grant’s terms meant Ollie had to pay the supplier upfront, so we provided him with the funds to coincide with this,” says RAF sales director Ben Wood. “He paid the supplier and because we do everything in-house at speed, we could put the funds back in his account the same day.”

Now the mill can harness energy from the River Sturkel 24 hours a day, slashing the company’s energy bill so much that the savings totally offset the repayments – while allowing the business to increase production to an unprecedented 1,000 tonnes of flour a day.

Got an idea for a diversification? See how Rural Asset Finance can help by emailing enquiries@ruralassetfinance.com or call directly on 0345 0303 475.

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