The Challenge for New Farming Businesses
Starting a farming business requires substantial capital investment in machinery and equipment, often before any revenue has been earned. Most mainstream lenders require two to three years of trading history, which effectively excludes new entrants from their standard agricultural finance products. However, specialist lenders and brokers experienced in agricultural start-ups can often find a solution.
At Doulton Bridging Finance, we work with several lenders who specifically support new farming businesses, including those with a tenancy or licence agreement rather than land ownership, and those transitioning from employed farming roles.
What Lenders Look for in Start-Up Farm Finance
Deposit or Equity
A deposit of 25–40% demonstrates commitment and reduces lender exposure. Some lenders will accept land or property equity in lieu of a cash deposit.
Agricultural Knowledge & Experience
Evidence of prior farming experience - employed positions, family farm background, agricultural qualifications - reassures lenders that the business is viable.
A Realistic Business Plan
A credible business plan with cashflow forecasts, land agreements, and market analysis significantly strengthens an application where accounts are not yet available.
Personal Credit Record
Where there is no business trading history, lenders fall back on personal credit. A clean record with no CCJs, defaults or recent missed payments is important.
Finance Options for New Farming Businesses
| Option | Availability for Start-Ups | Typical Deposit Required | Notes |
|---|---|---|---|
| HP - Specialist Lender | Yes (selected lenders) | 25–40% | Asset acts as security |
| Finance Lease | Yes (selected lenders) | 10–25% | Lender retains title - lower risk |
| Operating Lease | Yes | 0% | Pay-per-use model; lower commitment |
| Grant + Part-Finance | Yes | Grant covers partial cost | Combine DEFRA grants with commercial finance |
| High-Street Bank | Rarely | 30–50% | Prefer 3 yr accounts |
Step-by-Step: Getting Finance as a New Farmer
1. Prepare your documentation - tenancy agreement or land contract, business plan, personal bank statements, personal credit report, and any agricultural qualifications or employment references.
2. Identify the asset - get a dealer quote and specification for the equipment you need. Lenders finance specific assets, not general working capital.
3. Speak to a specialist broker - a broker with agricultural finance experience can identify which lenders are most likely to approve a start-up and make a targeted application.
4. Consider combining grant funding - check eligibility for Farming Investment Fund grants before committing to the full finance amount.
5. Review the offer carefully - compare APR, total cost of credit, and any balloon or optional final payments before signing.