Case Study – Farm & Agriculture

Upgrading Agricultural Equipment

Company —
Agricultural Business
Business Type —
Farming
Requirement —
Updated Farming Equipment
Solution —
Hire Purchase

Family Owned Farming Business Expands Operations with Finance

Learn how a family-owned agricultural enterprise with a long-standing tradition in farming and crop cultivation, recognised the need to update their equipment to stay competitive in the modern agricultural industry.

To enhance their farming operations and maximise productivity, a decision to invest in the latest tractors and crop storage facilities was made by this family owned agriculture business. Upgrading their equipment would not only improve efficiency but also enable them to diversify their income streams through crop diversification and value-added services.

  1. Capital for Equipment Upgrades: Purchasing the latest tractors and crop storage facilities required a substantial upfront investment. Financing these equipment upgrades without impacting their day-to-day farming operations was vital.

  2. Increasing Operational Costs: As with any agricultural enterprise, they needed a financing solution that could accommodate their equipment needs while managing the rising operational costs, including labor, seed, and fertiliser expenses.

  3. Diversification of Income: The business wanted to explore crop diversification and value-added services including on-site packing. However, entering new ventures required additional funding, which they needed to secure in a financially responsible manner.

To overcome these challenges and modernise their farming operations, the farm partnered with Portman Finance Group to provide farming and agricultural finance:

  1. Farm & Agriculture Equipment Finance: Securing farming finance with hire purchase from Portman enabled the purchase of the latest agricultural vehicles and crop storage facilities. This option allowed them to spread the cost of the equipment over a set period, easing the financial burden.

  2. Flexible Repayment Terms: Portman offered flexible repayment terms tailored to the customers cash flow patterns, allowing them to manage loan repayments in sync with their harvest cycles.

  3. Funds for farm diversification: Providing financing solutions to support efforts in crop diversification and value-added services. This funding enabled them to explore new agricultural ventures without putting a strain on their finances.
Farming - Case Study - Worker displaying Apples
  1. Enhanced Productivity: Through farming and agricultural finance, this business upgraded their equipment with the latest tractors and combine harvesters, resulting in a significant productivity increase. Modern tractors improved efficiency during planting, harvesting, and other critical farming tasks. Onsite sorting and packing equipment reduced outgoings and reduced harvest to customer times considerably, thus improving quality of goods received by customers.

  2. Crop Storage Efficiency: The new crop storage facilities offered better preservation conditions, minimising crop losses and ensuring high-quality produce. This contributed to increased revenue and reduced waste.

  3. Income Diversification: With access to diversification finance, the business successfully ventured into growing alternative crops and offering value-added services such as agritourism and farm produce sales. These new income streams boosted their financial resilience.

Farming business expanding their services through equipment
  1. Financial Capacity: Equipment finance from Portman allowed the acquisition of vital new equipment and fund new ventures without depleting their working capital.

  2. Cash Flow Management: Flexible repayment terms provided by Portman allowed the management of cash flow fluctuations effectively. The family-owned Farming business was able to comfortably meet loan repayments while investing in their farming operations.

  3. Risk Mitigation: The strategic use of finance allowed diversification of their income streams without taking on excessive financial risk. This ensured a balanced approach to growth and sustainability.

Through strategic finance support from Portman, the business successfully updated their farming and agriculture equipment, including tractors and crop storage facilities. The finance solutions provided the flexibility and financial capacity needed to modernise their operations, diversify their income streams, and remain competitive in the dynamic agricultural industry.

Partner with Portman, for a successful future

There are plenty of finance options out there for you, deciding which is right for you will take time and consideration. But why should you choose these financing options from Portman?

At Portman Finance Group we are focused on serving the needs of you and your businesses, and have been doing so for thousands of other businesses since 2007, raising over £1 billion in funding for UK SMEs. 

We take the time to truly understand your business and what you need, ensuring we secure the right funding for you. As both a broker and a lender, we can also offer financial options that others cannot. We promise you will have one point of contact from start to end, providing you solutions quickly, sometimes within hours.

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Hire Purchase

Hire purchase usually involves paying the VAT and a deposit up-front. Fixed monthly repayments are then made, affected by whether you pay off the entire loan over the term or chose a final balloon payment. The final option to purchase is guaranteed for a nominal fee, transferring ownership of the asset to the customer.

Hire purchase is well-suited for situations where a company definitely wants to own the item at the end of the term, often where the asset has a significant usable lifespan, a high residual value and will not need to be upgraded.

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Lease Finance

Equipment leasing allows a business to acquire hard or soft assets without the upfront costs associated with large purchases. A lender purchases the item, the business then leases it through fixed monthly payments over an agreed term.

Typically, asset finance is provided for high value ‘hard’ assets such as machinery, equipment, or vehicles, but Portman also arranges asset finance for ‘soft’ assets such as IT, fitness, catering, or vending equipment, as well as premises fit-outs, furniture or even air-conditioning.

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Business Loans

Business loans are a way of borrowing money, which is repaid in monthly instalments, including interest, over an agreed term. Business loans are a common way to help smooth out cashflow fluctuations and take opportunities where otherwise they could be missed due to a lack of working capital.

Business loans can be secured or unsecured. Portman typically provides unsecured loans which can be more flexible and do not require collateral but are likely to require a personal guarantee. Secured loans are tied to an asset which the lender can claim ownership of if repayments are not made, these may be used in equipment refinance deals.

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Start Up Loans

New businesses often need an injection of finance to get them off the ground. Asset finance for new businesses allows you to focus on running your company and bringing in customers, confident that you have the equipment, vehicle or stock you need without the large initial outlay.

Using finance for your equipment means that you preserve the credit card or overdraft for contingency and operating expenses when the unexpected happens.

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Equipment Refinance

If you recently bought a high-value item outright but would now prefer to have financed it, we can help with a sale-and-lease-back agreement. If the item is less than 3m old, give us a copy of the invoice and we will calculate the current value. After a few checks and acceptance of the term and monthly repayments, we can give you the cash equivalent of the invoice to put back into the business. You’ll then make fixed monthly payments including interest, whilst your asset earns you money.

If your business owns high value assets that are not currently on finance, subject to a valuation, it is also possible to use them as security for a loan, with lenders offering a cash loan up to a % of the asset’s value.

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Recovery Loans

Recovery Loans offer an excellent way of making sure your business gets back on its feet after the long-term effects of the pandemic and subsequent supply chain disruption. Businesses with turnovers up to £45m, including those who have previously benefited from the government’s CBILS, BBL or RLS, can apply.

Recovery Loans can be used for any legitimate business purpose or simply to provide cashflow. Rates are capped and the government continues to guarantee 70% of the outstanding balance, giving added security for lenders who are now able to consider finance for businesses who may have previously found it difficult to obtain.

Up to £2m can be borrowed on terms from 2 to 6 years. Your personal private residence cannot be taken as security.

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