Agricultural Asset Finance Solutions for Farmers To Help You Grow

Today, the farming and agriculture industry faces more than the challenges presented by the weather. When you aren’t tending to your crops and making the most of the dry weather, what are you doing? Facing the finances most likely and in today’s economic climate, potentially considering or researching agricultural asset finance.

As with most businesses, rising prices in so many areas are making the bottom line all the more difficult to keep out of the red. Not only are you spending more on energy bills to keep barns lit and heated, but you are also paying more for the essential equipment you need. And like a photographer without a camera, a farmer without their equipment is not very productive.

So, how do you get around this challenge? Asset finance. With the various finance options available, there is one to suit your situation and needs so that you can get the equipment you need to help you grow.

At Honey Asset Finance, we offer a number of farm equipment financing that are flexible and bespoke to you. Working with leading finance experts, we are able to get you the best deals so you get the tools you need for a monthly payback price you can afford.

In this blog, we discuss your potential options and how you can choose the right one.

The Role of Asset Finance in Agriculture

Before diving in, let’s cover the basics, in case you don’t already know.

What Is Asset Finance?

Asset finance is funding you can get to access the equipment and tools you need without paying the upfront purchase costs. Instead, you pay repayments for a set period so that you can manage cash flow more easily.

Agricultural asset finance is a specific aspect of this broader service, which focuses on providing farming and agricultural equipment to those who need it with a repayment plan that works around their financial challenges.

These loans can also be used to help expand land wealth or infrastructure, providing opportunities for you to grow and increase sources of income.

How Does It Help You?

You can use it to purchase most agricultural equipment without needing the large purchase sum upfront.

Equipment you can access through it can include:

• Tractors
• Combines
• Irrigation systems
• Other farm equipment

While predominantly used for equipment and tool purchases, agricultural asset finance can also be used to cover a wide range of expenses.

These can include:

• Land Expansion – purchasing additional farmland to increase production capacity.
• Infrastructure Improvements – building or upgrading barns, silos, greenhouses, and irrigation systems.
• Livestock Purchase – expanding herds or flocks to increase revenue.
• Crop & Seed Investments – covering the upfront costs of planting and harvesting.
• Technology & Sustainability Upgrades – investing in precision farming tools, solar panels, or eco-friendly irrigation.
• Working Capital – managing day-to-day operational expenses like labour, feed, and fertiliser.

Why Choose Farm Equipment Financing?

There are a few different benefits to asset financing for the farming and agricultural sector:

• You don’t need the whole purchase cost upfront
• It helps preserve cash flow
• It can make budgeting slightly easier with regular amounts going out
• Helps keep on top of technological advances
• Can offer tax benefits sometimes

So, what are your agricultural asset finance options?

What Agricultural Loans Are Available?

Once you know you need some financial assistance, there are several options to choose from.

1. Hire Purchase – purchase the equipment you need but pay for it over a set amount of time with fixed monthly repayment. At the end of the term, you are the owner of the equipment. This is perfect if you are looking to grow your assets but don’t have the upfront cost to do it.
2. Lease Finance – rent the equipment you need for a certain amount of time with fixed monthly payments. This is a great way to keep up-to-date with equipment without constantly paying high purchase costs.
3. Operating Lease – pay for the equipment while you are using it and give it back at the end of the contract. This is ideal if you frequently upgrade your machinery.
4. Refinance – generate cash from the assets you already have by using them as collateral against the loan. This allows you to invest in new equipment or opportunities without losing the equipment you already have – as long as you maintain the repayments.
5. Bridging Loan – get a short-term loan to purchase more land or equipment to cover you while waiting for other means of financing to become available.

Choosing the Right Agricultural Asset Finance Option for Your Farm

As with any choice, there are some factors you should consider before choosing the right agricultural asset finance for your situation and agricultural business.

These factors include:

• Budget And Cash Flow – if cash flow is tight, then a leasing option offers lower upfront costs. If you have some cash available, then a hire purchase allows you to invest in equipment to keep.
• Long-Term Vs. Short-Term Investment – if your goals are long-term investment, then a hire purchase means you can keep the equipment at the end of the contract. However, if you are looking for something for the short term (say for a season), then leasing might be the way to go.
• Ownership Preferences – if you want to own the equipment, then a hire purchase is a way to get equipment, or refinancing allows extra cash. However, if you are happy to rent, opting for flexibility and regular upgrades, leasing would work for you. 

Below, we share the information for each of these considerations so you can make an informed decision.

Hire Purchase

Best For: Businesses wanting to own equipment but spread the cost over time.

Ownership: You own the equipment after the final payment.

Key Benefits:

• Fixed repayments
• Asset ownership at the end of the term
• Ideal for long-term investments

Considerations:

• Requires a deposit
• Equipment may depreciate in value over time

Lease Finance

Best For: Companies that want access to the latest equipment without committing to ownership.

Ownership: You won’t own the equipment unless a purchase option is available at the end.

Key Benefits:

• Lower upfront cost
• Predictable payments
• Access to up-to-date machinery

Considerations:

• You never own the asset
• Long-term leasing could be more expensive than buying outright

Operating Lease

Best For: Businesses that frequently upgrade equipment or only need it for a limited period.

Ownership: You won’t own the equipment, and it is returned at the end.

Key Benefits:

• Use the latest equipment without the hassle of ownership
• Ideal for short-term needs

Considerations:

• Continuous payments with no equity in the asset

Refinance

Best For: Businesses needing to release capital from existing assets to reinvest elsewhere.

Ownership: You retain ownership, but the asset is used as collateral.

Key Benefits:

• Frees up cash without selling valuable assets

Considerations:

• If repayments are missed, the asset could be repossessed

Bridging Loan

Best For: Businesses needing short-term financial support, such as buying land or covering temporary cash gaps.

Ownership: Dependent on the loan terms and what is financed.

Key Benefits:

• Quick access to funds to bridge gaps before securing long-term financing

Considerations:

• Typically, higher interest rates
• They require a clear repayment strategy

Turn to Us For Your Agricultural Asset Finance Options

Running a farm or agricultural business means you face unique challenges. At Honey Asset Finance, we understand these, specialising in helping farmers and agricultural businesses like yours secure the equipment or cash you need to operate and enhance productivity.

Every farm and business is different, so we offer flexible and bespoke finance packages that are built around your specific needs.

On top of this, we work with leading finance experts to secure the best deals for you, ensuring they are affordable and flexible so that they can work around the seasonal and cyclical nature of agriculture.

If you are looking for farm equipment finance options to help your agricultural business, don’t hesitate to get in touch with our experts. We are a friendly team who are passionate about helping our communities and local businesses thrive through getting the assets they need.

Call us on 01305 239500 to discuss the best option for you and your needs. Alternatively, complete our online contact form and we will give you a callback.