Frequently Asked Questions about Agricultural Funding

How much can I borrow?
We can obtain up to 80% of the purchase price, or property value which ever is the lower.
This is subject to being able to show that the proposed loan is serviceable.  100% can be achieved with extra security, again subject to serviceability.

What can I use the money for?
Subject to the purpose being legal, the money you borrow can be used for any purpose.  You may wish to carry out repairs and alterations to the farm, inject longer term working capital to buy livestock or finance next years or just restructure the debt you have onto more favourable terms.

I am not sure what type of finance I need?
We will talk your circumstances through with you and ascertain your long-term goals.  We will then suggest a funding package that suits your requirements.

What are the repayment terms?
The term can be arranged to suit your circumstances, 20 years is typical, but we can arrange up to 40 years.  To assist cash flow some of our panel lenders will allow interest only periods of up to 1 year.

What are the interest rates?
This largely depends on the quality of the agricultural business, the experience of the applicant, loan to value and the strength of the accounts.  But typically this would range between 3 and 4% above base rate.  We would search for the best rate possible on your behalf.

What will be the monthly repayment?
The table below provides a monthly cost per month per £000 borrowed on a capital and interest repayment basis.

Interest
Rate
Number of years of loan
Interest
Only (£)
5
7
10
12
15
20
25
£
£
£
£
£
£
£
3.75
 18.30 13.55 10.00 8.63 7.27 5.92 5.13 3.13
4.00
 18.41 13.66 10.12 8.75 7.39 6.05 5.27 3.34
4.25
 18.52 13.78 10.24 8.87 7.52 6.18 5.41 3.54
4.50
 18.64 13.89 10.36 8.99 7.64 6.32 5.55 3.75
4.75
 18.75 14.01 10.48 9.11 7.77 6.45 5.69 3.96
5.00
 18.86 14.12 10.60 9.24 7.90 6.59 5.83 4.17
5.25
 18.98 14.24 10.72 9.36 8.03 6.73 5.98 4.38
5.50
 19.09 14.36 10.84 9.49 8.16 6.87 6.13 4.58
5.75
 19.20 14.48 10.96 9.62 8.29 7.01 6.27 4.79
6.00
 19.32 14.59 11.09 9.74 8.42 7.15 6.42 5.00

 

What if my accounts are weak?
Agricultural funding is still available for applicants with poor or weak accounts. 
The lenders will simply rely upon the 90 Day Freehold Value and lend up to 70%. 
The interest rates will be higher, but lenders can offer interest only to assist cash flow.

What costs are involved?

  • Valuation fee of between £300 and £1,500 (plus vat).  The variation is due to the type of valuation, value of premises and location.
  • Bank arrangement fee will be between 1% and 2% of the loan.  Often this can be added to the loan on completion
  • Land registry fees and disbursements in the region of £400
  • Legal fees (these will vary from firm to firm)
  • Stamp duty (Up to £150k – 0%, Up to £250k – 1%, Up to £500k – 3%, Over £500k – 4%)
  • Broker Fees - Typically 1% but not payable until deal completes.

Can you help with a deposit?
The maximum loan we can achieve is usually 70%, and you need to contribute 30% plus costs (covered above).  Some lenders will take a second charge on your private residence to cover this amount.
Alternatively we can assist you with refinancing your current residential property, to release additional equity.

What are the timescales?
In most cases, we can obtain an agreement in principle within 72 hours.
A valuation will take up to 2 weeks to arrange.
The rest is dependent upon the speed of your solicitors (and sellers solicitors if a new purchase).
This can be 2 to 3 weeks.

What do I do next?
Call us, email us, or submit an online enquiry request.
One of our experienced consultants will then contact you and discuss your requirements in more detail.

© 2011 : Sterling Capital Reserve Ltd

Sterling Capital Reserve Ltd
Sterling House, 10 Wheatcroft Business Park, Landmere Lane, Edwalton, Nottingham NG12 4DG
Tel: 0115 984 9800 Fax: 0115 921 5550

Associations

ANY PROPERTY USED AS SECURITY, INCLUDING YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
EARLY REPAYMENT CHARGES APPLY. A BROKER FEE MAY APPLY.

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