The traditional view of finance is that it should be avoided at all costs, but according to rural mortgage consultants, Rural and Business Specialists Ltd, it is one of the most under-utilised business tools available to farming.
“Finance is not something to be wary of. Many successful businesses have been built upon regular investment, often from borrowed sources,” says Jim Richards of R&BS Ltd.
“Just as a new piece of machinery can inject efficiency and productivity into your business, similarly, finance can act as a catalyst to boosting your business.”
David Campbell, of Yorkshire-based farm consultancy company, DFRS (Direct Farming and Rural Solutions Ltd), shared this opinion.
“Good businesses are based on sound financial structures,” he says. “With the right advice you can turn a negative into a success, but the important thing is to embrace change in order to make it happen.”
He added: “However in today’s economic climate you must ensure that the advice you receive is correct, with ongoing support. Knowledge of your market is key, both in terms of your lender and yourself.”
When first considering finance for a particular project it is recommended that an investment appraisal, even in its basic form of income vs. expenditure, be conducted.
The key things to consider when doing this are:
1. Is the resulting income sufficient reward for your efforts?
2. And crucially, how long will it take to generate the extra income?
Once you have satisfied yourself, seek independent advice for confirmation.
“If you view finance as an integral part of your business it may open up avenues that may not have been previously thought of as available,” says Mr Richards. “You could use it to expand an existing enterprise, aid the purchase of a farm or land, assist a diversification, or even to contribute toward off farm investments.
“There is a solution to suit all purposes. What R&BS Ltd does is take the pain out of borrowing by offering low-risk, low-cost finance, designed to suit individual needs. We see ourselves as facilitators - helping clients unlock the untapped potential from their farm or holding.”
