Bank margins offer opportunities amid turbulent year

With the arrival of Autumn, we reflect on what a remarkable climatic and financial year this has been to date.

We entered 2026 with the arable farmers reeling from successive challenging years and dairy and potato producers also under pressure. Many sectors were therefore looking for any signs of encouragement through strengthening commodity prices or reduced input costs. The outbreak of war in Iran quickly reversed any hopes of Bank of England base rate cuts, with fixed rates rising steadily ever since.

Banks’ lending margins have, however, become much more attractive over the last year and many businesses are now reaping the cashflow benefits of locking into more favourable lending margins.

Change and uncertainty have been significant factors in 2026. Following the unprecedented drought across our region and severe wildfires both locally and worldwide, political attention will undoubtedly return to climate change where traditional agricultural practices often find farming in the spotlight and with another change of Prime Minister and all traditional political parties clambering to stem the rise of the newcomers, who knows what comes next.

Aware that opportunities often emerge out of change and, or uncertainty many forward-thinking farm businesses are currently reviewing the structure of their finance arrangements not only to benefit from improved lending margins but to be ready to seize such opportunities when they arise.

When reviewing finance options, attractive lending margins from alternative lenders can often sound attractive but the potential benefits need to be distilled down to pounds and pence and compared to the costs associated with moving banks. It’s therefore important to engage with a finance specialist who can highlight the features, benefits and risks associated with the various products and their suitability for your own situation.

Andrew Connah, head of rural finance at Balfours, has over 30 years’ experience in agricultural consultancy and banking and is proving to be invaluable in helping many Balfours clients to access funding solutions which are right for them.

Andrew comments that “it’s important to recognise that everyone’s circumstances are different and that the right finance package for one business may not be right for others. By having access to all the high street banks and some private banks we can be sure of finding a finance solution that can be tailored to individual needs”.

If you would like to speak with Andrew, on a no obligation basis, please call him on 07538 321201.