Generational Transfers

Looking to transfer your farm to the next generation, possibly below market value, but wanting to keep some of your capital?  One of our loans might help you achieve this.

Conventional lenders won’t lend if you’re selling to a family member, but we can lend against the open market value of the land (rather than the potentially lower price you are selling at) so you can receive some cash and your next generation gains ownership of the land, so that in due course they can refinance with a conventional lender. Obviously, the farm needs to be able to support the expected conventional lender’s loan and your next generation should be capable of running the farm as well as you!

Lending Critera Overview

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Loan size
£100,000 to £5,000,000
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Location
England, Scotland and Wales*
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Borrower
Sole traders, partnerships, limited companies
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Loan to value limit
65%
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Security
Agricultural land and property
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Use of proceeds
Purchase farm from family plus working capital
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Age limits
None, but may require a guarantor depending on farming experience
Before taking out a loan from us, it’s important to familiarise yourself with our Terms & Conditions.

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Step 1

You decide to pass on your farm to the next generation, but also want to release some cash:

  • Research option and agree a transfer plan with the entire family
  • Business plan
  • Research different funding sources
Step 2

You contact us:

  • How much would you like and who is the money going to
  • What’s the security worth on the open market compared to the transfer value
  • When do you need the money
  • What existing debts are there
  • How will you repay us
  • Anything else we should know
Step 3

We send you a decision in principle for you to accept:

  • How much we can lend, the interest rate and any fees
  • Your only commitment at this stage is for any costs incurred on legal or valuation fees
Step 4

Your application goes to a dedicated loan officer:

  • They help and guides you through the process from start to finish
  • We instruct an independent valuation of the property
  • You appoint a solicitor to act for you
Step 5

Your loan officer asks for:

  • Information, such as bank statements, business accounts, tenancy agreements, your business plan, your team’s expertise, a net worth statement and the plan to repay our loan
  • We do credit and land registry checks and the solicitors complete normal conveyancing checks
Step 6

We visit you at the farm to:

  • Get to know you and your current business, as well as your new plans
  • Understand your repayment plan
Step 7

Your solicitor:

  • Explains everything in the documentation
  • You ask about anything you don’t understand
  • You sign to confirm having received independent advice, then sign the contractual paperwork
  • We sign, the loan completes and you receive the funds
Step 8

You build your business and repay our loan

Case Studies

Financing for Generational Take-over

Two brothers had run the farm together for many years, but when one brother passed away, an acrimonious family dispute ensued with their non-farming son, who wanted paying out on his inheritance.