Case Study: Young farmer contractor start-up 

The Challenge

After working in a contracting business, an entrepreneurial farmer based in Blandford Forum, Dorset wanted to set up on their own. As a hardworking director, they could achieve greater financial success and independence. As a new company with no ownership of a farm and limited track record, looking for borrowing in a risk-averse credit market, the farmer risked only being approved with high-cost lenders. In addition, there was a huge amount of day-to-day work, meaning there wasn't time to put lots of paperwork together - a common challenge faced by those seeking farm machinery finance while launching a contracting business.

Our Solution

Collaborating with the contractor, we put together a list of implements prioritised by current client demand so the business could generate immediate cashflow. Securing a grant for one piece of equipment was key, which required us to adopt a tailored financing approach. We strategically scheduled machinery purchases over 23 months, using both short- and long-term borrowing. This approach ensured the business could grow rapidly without facing financial distress.

Using our knowledge of which lenders understood the farming community and how to present a clear forecast, we could secure funding. We met with the farmer, and having understood their strong determination to succeed and business skills, we directly funded assets that required a fast approval or were unusual assets that other lenders were unable to lend against. This was a key part of creating an effective farm machinery finance strategy.

The Result

By focusing on fulfilling immediate customer needs, the business initiated a cycle of increased cash flow, facilitating further financing opportunities. Within just 23 months, the contractor experienced a 7.5-fold growth in monthly earnings, establishing a solid reputation in the region. Notably, we reduced monthly payments for a major piece of equipment by 43%, transforming a seemingly impossible purchase into an achievable one, thus alleviating future maintenance concerns.