Now is the time to revisit bank loans

Now could be an opportune time for farmers and landowners to revisit any loans taken out over the past 17 years, since the 2008 financial crash. The message was delivered by Andrew Connah, Head of Rural Finance at Balfours addressing a capacity audience of more than 90 professionals at Balfours Xtra.

Whether restructuring existing debt or seeking new finance, financiers are now offering much more favourable lending margins than at any time since the financial crash of 2008.

Andrew went on to explained: “The outlook for agriculture is of a growing world population leading to much finer global balance of supply and demand for food products and hence the significant commodity price volatility that we have seen across most sectors in recent years – the dairy industry being the latest victim. Add to this is the uncertainty of government support and all these factors combined lead to farm profits now being much less predictable year to year.

“Against this backdrop farm businesses should take this opportunity to review not only their lending margin, but also the terms of their current facilities. Particularly be very mindful of the potential consequences of any onerous review clauses, or debt-servicing covenants, within the small print of their loan agreement. Most importantly, when reviewing their finances, borrowers should always seek a long-term commitment from their lender.

Andrew, who is highly experienced in agricultural banking and finance has excellent relationships with AMC and other trusted lenders concludes: “With such volatility and uncertainty, structuring debt correctly to face the future with more confidence has become increasingly important; not only to protect against such instability but also to be in a stronger position to take greater advantage of the opportunities which tend to emerge from such times.” For more information call 07538 321201, email andrewconnah@balfours.co.uk